To repeal sections 169.450 and 169.460, RSMo 1994, relating to certain retirement systems, and to enact in lieu thereof three new sections relating to the same subject.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI,

AS FOLLOWS:

Section A. Sections 169.450 and 169.460, RSMo 1994, are repealed and three new sections enacted in lieu thereof, to be known as sections 169.450, 169.460 and 169.471, to read as follows:

169.450. 1. The general administration and responsibility for the proper operation of the retirement system and for making effective the provisions of sections 169.410 to 169.540 are hereby vested in a board of trustees of eleven persons, as follows:

(1) Four trustees to be appointed for terms of four years by the board of education; provided, however, that their terms shall be fixed so the terms of one of the trustees so appointed shall expire each year;

(2) Four trustees to be elected for terms of four years by and from the active members of the retirement system who shall hold office as trustees only while active members; provided, however, that their terms shall be fixed so that the terms of one of the trustees so elected shall expire each year; and provided further, that not more than two of such persons shall be teachers and two shall be nonteachers;

(3) Two trustees, who shall be retirants, to be elected for terms of four years by and from the retirants of the retirement system; provided, however, that the terms of office of the first two trustees so elected shall begin immediately upon their election and shall expire two and four years from the date of their election, respectively; and provided further, that not more than one of such persons shall be a teacher and one shall be a nonteacher;

(4) One nonvoting member, not a teacher or an officer of the state or of any political subdivision of the state, who shall be experienced in the investment of moneys, to be elected for a term of four years by a majority vote of the other ten members of the board of trustees.

2. If a vacancy occurs in the office of trustee, the vacancy shall be filled for the unexpired term in the same manner as the office was previously filled.

3. The members of such board of trustees appointed by the board of education shall be members of the board of education and shall hold office as trustee only while members of the board of education. The trustees shall serve without compensation, except that the trustee elected by a majority vote of the remaining ten trustees shall be paid such compensation as may be agreed upon with such remaining ten trustees, and any trustee shall be reimbursed from the expense fund for all necessary expenses which he may incur through service on the board of trustees.

4. Each trustee shall, within ten days after his appointment or election, take an oath of office before the clerk of the circuit court of the judicial circuit in which the school district is located that, so far as it devolves upon him, he will diligently and honestly administer the affairs of the board of trustees and that he will not knowingly violate or willingly permit to be violated any of the provisions of the law applicable to the retirement system. Such oath shall be subscribed to by the trustee making it and filed in the office of the clerk of the circuit court.

5. The circuit court of the judicial circuit in which the school district is located shall have jurisdiction over the members of the board of trustees to require them to account for their official conduct in the management and disposition of the funds and property committed to their charge; to order, decree and compel payment by them to the public school retirement system of their school district of all sums of money, and of the value of all property which may have been improperly retained by them, or transferred to others, or which may have been lost or wasted by any violation of their duties or abuse of their powers as such members of such board; to remove any such member upon proof that he has abused his trust or has violated the duties of his office; to restrain and prevent any alienation or disposition of property of such public school retirement system by the members, in cases where it may be threatened, or there is good reason to apprehend that it is intended to be made in fraud of the rights and interests of such public school retirement system. The jurisdiction conferred by sections 169.410 to 169.540 shall be exercised as in ordinary cases upon petition, filed by the board of education of such school district, or by any two members of the board of trustees. Such petition shall be heard in a summary manner after ten days' notice in writing to the member complained of, and an appeal shall lie from the judgment of the circuit court as in other causes and be speedily determined, but such appeal shall not operate under any condition as a supersedeas of a judgment of removal from office.

6. Each trustee shall be entitled to one vote in the board of trustees. Six votes shall be necessary for a decision by the trustees at any meeting of the board of trustees.

7. Subject to the limitations of sections 169.410 to 169.540, the board of trustees shall, from time to time, establish rules and regulations for the administration of the assets of the retirement system and for the transaction of its business.

8. The board of trustees shall elect from its membership a chairman and shall, by majority vote of its members, appoint a secretary, who may be, but need not be, one of its members. It shall engage such actuarial and other services as shall be required to transact the business of the retirement system. The compensation of all persons engaged by the board of trustees and all other expenses of the board necessary for the operation of the retirement system shall be paid at such rates and in such amounts as the board of trustees shall approve.

9. The board of trustees shall keep in convenient form such data as shall be necessary for actuarial valuations of the assets of the retirement system and for checking the experience of the system.

10. The board of trustees shall keep a record of all its proceedings which shall be open to public inspection. It shall prepare annually and send to the board of education and to each member of the retirement system a report showing the fiscal transactions of the retirement system for the preceding fiscal year, a detailed listing of all salaries and expenditures incurred by the trustees for its operation, the amount of the accumulated cash and securities of the system, and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system. The board of trustees shall also prepare or cause to be prepared an annual report concerning the operation of the retirement system herein provided for, which report shall be sent by the chairman of the board of trustees to the board of education.

11. The board of trustees shall arrange for necessary legal advice for the operation of the retirement system.

12. The board of trustees shall designate a medical board to be composed of three physicians, none of whom shall be eligible for benefits under sections 169.410 to 169.540, who shall arrange for and pass upon all medical examinations required under the provisions of sections 169.410 to 169.540, shall investigate all essential statements and certificates made by or on behalf of a member in connection with an application for disability retirement and shall report in writing to the board of trustees its conclusions and recommendations upon all matters referred to it.

13. The actuary shall be the technical adviser of the board of trustees on matters regarding the operation of the system created by sections 169.410 to 169.540 and shall perform such other duties as are required in connection therewith. He shall be qualified as an actuary by membership as a fellow in the Society of Actuaries or by similar objective standards.

14. At least once in each five-year period the actuary shall make an investigation into the actuarial experience of the retirement system, and taking into account the results of such investigation of the experience, the board of trustees shall adopt for the retirement system such actuarial assumptions as shall be deemed necessary.

15. On the basis of such actuarial assumptions as the board of trustees shall adopt, the actuary shall make an annual valuation of the assets and liabilities of the funds of the retirement system.

16. On the basis of the valuation the board of trustees shall certify the rates of contribution payable by the board of education.

169.460. 1. Any member may retire on a service retirement allowance upon his written application to the board of trustees setting forth at what time not less than fifteen days nor more than ninety days subsequent to the execution and filing of such application he desires to be retired; provided, that the member at the time so specified for his retirement either (a) shall have attained age sixty-five or (b) shall have attained an age which when added to the number of years of creditable service of such member shall total a sum not less than eighty-five. For purposes of computing any member's age under this section, the board shall add to his actual age any accumulated and unused days of sick leave included in his creditable service.

2. Upon retirement for service under subsection 1 of this section, a member shall receive an annual service retirement allowance payable in monthly service installments equal to his number of years of creditable service multiplied by [one and one-fourth] one and one-half percent of his average final compensation.

3. A member who is not eligible for service retirement under subsection 1 of this section but has attained age sixty and has five or more years of creditable service may make application in the same manner as under subsection 1 of this section for an early service retirement allowance which shall be a percentage of his projected annual service retirement allowance. His projected annual service retirement allowance shall equal his number of years of creditable service multiplied by [one and one-fourth] one and one-half percent of his average final compensation. The percentage of his projected annual service retirement allowance shall be computed by deducting from one hundred percent a sum equal to five-ninths of one percent for each month such member's early retirement date precedes the earliest date he could receive a service retirement allowance under subsection 1 of this section had his service continued.

4. Upon the written application of the member or of the employing board, any active member who has had five or more years of creditable service with such board and does not qualify for service retirement under subsection 1 of this section may be retired by the board of trustees, not less than fifteen and not more than ninety days next following the date of filing such application, on an ordinary disability retirement allowance; provided, that the medical board after a medical examination of such member shall certify that such member is unable to further perform his duties due to mental or physical incapacity, and that such incapacity is likely to be permanent and that such member should be retired. The determination of the board of trustees in the matter shall be final and conclusive. A disability retirant who has accumulated unused vacation and sick leave may elect to have the commencement of his disability retirement allowance deferred for more than ninety days during the period he is entitled to vacation and sick pay.

5. Upon retirement for disability, a member shall receive a disability retirement allowance which shall be the larger of:

(1) A service retirement allowance based on his creditable service to the date of his disability retirement and calculated as if he were age sixty-five; or

(2) One-fourth of his average final compensation; except that such allowance shall not exceed the service retirement allowance which he would receive upon retirement had his service continued and satisfied the eligibility requirements of subsection 1 of this section and had his final average compensation been unchanged.

6. Once each year during the first five years following retirement on a disability retirement allowance and once in every three-year period thereafter, the board of trustees may, and shall, require any disability beneficiary who has not yet become eligible for service retirement pursuant to subsection 1 of this section to undergo a medical examination at a place designated by the medical board or by a physician or physicians designated by such board. Should any such disability beneficiary refuse to submit to such medical examination, his allowance may be discontinued until his withdrawal of such refusal, and should his refusal continue for one year, all rights in and to his pension may be revoked by the board of trustees.

7. Should the board of trustees find that any disability retirant is engaged in or is able to engage in a gainful occupation paying more than the difference between his retirement allowance plus benefits, if any, to which he and his family are eligible under the federal Old Age, Survivors and Disability Insurance System of the Social Security Act and the current rate of monthly compensation for the position he held at retirement, then the amount of his retirement allowance shall be reduced to an amount which together with the amount earnable by him shall equal such current rate of monthly compensation. Further adjustments in the disability retirement allowance because of earnings changes shall be made by the board of trustees. The decisions of the board of trustees in regard to such modification of disability allowance shall be final and conclusive.

8. Should any disability retirant be restored to service as an employee, he shall again become a member of the retirement system and contribute thereunder. If he is under age sixty at date of again becoming a member, his creditable service at the time of his retirement shall be restored to full force and effect, and the excess of his accumulated contributions at retirement over the total payments which he received during retirement shall be credited to his account. If he is age sixty or over, his disability retirement allowance shall cease and be resumed upon subsequent retirement, together with such retirement allowance as shall accrue by reason of his latest period of membership.

9. Should a member cease to be an employee, except by death or retirement, he shall be paid on demand the amount of his accumulated contributions standing to the credit of his individual account, provided that a member with five or more years of creditable service may leave his accumulated contributions with the retirement system and be an inactive member and claim a retirement allowance at any time after he reaches the minimum age for voluntary retirement. When his claim is presented to the board of trustees, he shall be granted an allowance at such time and for such amount as is available under subsection 2 or 3 of this section in accordance with the provisions of law in effect at the time his active membership ceased. The accumulated contributions of an inactive member may be withdrawn at any time upon ninety days' notice or such shorter notice as is approved by the board of trustees. Should a member die before retirement, his accumulated contributions shall be paid to his designated beneficiary, if living, otherwise to the estate of the member. A member's accumulated contributions shall not be paid to him so long as he remains in service as an employee.

10. Any member upon retirement shall receive his benefit in a retirement allowance payable throughout life subject to the provision that if his death occurs before he has received total benefits at least as large as his accumulated contributions at retirement, the difference shall be paid in one sum to his designated beneficiary, if living, otherwise to the estate of the retired member.

11. Prior to the date of retirement under subsection 2, 3, or 4 of this section, a member may elect to receive the actuarial equivalent at that time of his retirement allowance in a lesser retirement allowance, payable throughout life under one of the following options with the provision that:

Option 1. Upon his death, his retirement allowance shall be continued throughout the life of and paid to his beneficiary, or

Option 2. Upon his death, one-half of his retirement allowance shall be continued throughout the life of and paid to his beneficiary, or

Option 3. Upon his death, his retirement allowance shall be continued throughout the life of and paid to his beneficiary, provided that in the event his designated beneficiary predeceases him, then his retirement allowance shall be adjusted at that time to the amount determined under subsection 2 or 3 of this section at the time of his retirement, or

Option 4. Upon his death, one-half of his retirement allowance shall be continued throughout the life of and paid to his beneficiary, provided that in the event his designated beneficiary predeceases him, then his retirement allowance shall be adjusted at that time to the amount determined under subsection 2 or 3 of this section at the time of his retirement. The survivor benefits payable to a beneficiary, other than the spouse of the retirant, under any of the foregoing options shall in no event exceed fifty percent of the actuarial equivalent of the retirement allowance determined under subsection 2 or 3 of this section at the time of retirement. The actuarial equivalent of a member's retirement allowance shall be computed as of the earlier of his actual retirement or the date he became eligible for service retirement under subsection 1 of this section.

12. If an option has been elected under subsection 11 of this section, and both the retired member and beneficiary die before receiving total benefits as large as the member's accumulated contributions at retirement, the difference shall be paid to a designated beneficiary, if living, otherwise to the estate of the person last entitled to benefits.

13. If an active member dies while an employee and with five or more years of creditable service and a dependent of the member is designated as beneficiary to receive his accumulated contributions, such beneficiary may, in lieu thereof, request that benefits be paid under option 1, subsection 11 of this section, as if the member had attained age sixty, if the member was less than sixty years of age at the time of his death, and had retired under such option as of the date of death, provided that under the same circumstances a member may provide by written designation that benefits must be paid under option 1 to such beneficiary. In addition to benefits received under option 1, subsection 11 of this section, a surviving spouse receiving benefits under this subsection shall receive sixty dollars per month for each unmarried dependent child of the deceased member who is under twenty-two years of age and is in the care of the surviving spouse; provided, that if there are more than three such unmarried dependent children one hundred eighty dollars shall be divided equally among them. A "dependent beneficiary" for the purpose of this subsection only shall mean either the surviving spouse or a person who at the time of the death of the member was receiving at least one-half of his support from the member, and the determination of the board of trustees as to whether a person is a dependent shall be final.

14. If the board of trustees is unable to refund the contributions of a member or to commence payment of benefits after such refund or benefits are otherwise first due and payable and thereafter, proper application is made for such refund or benefits, the board will make payment of such refund or benefits but no credit will be allowed for interest after the date the refund or benefits were first due and payable.

15. In lieu of accepting the payment of the accumulated contributions of a member who dies after having at least eighteen months of creditable service and while an employee, an eligible beneficiary or, if no surviving beneficiary, the unmarried dependent children of the member under twenty-two years of age may elect to receive the benefits under subdivision (1), (2), (3), or (4) of this subsection. An "eligible beneficiary" is the surviving spouse, unmarried dependent children under twenty-two years of age or dependent parents of the member, if designated as beneficiary. A "dependent" is one receiving at least one-half of his support from the member at his death.

(1) A surviving spouse who is sixty-two years of age at the death of the member or upon becoming such age thereafter, and who was married to the member at least one year, may receive sixty dollars per month for life. A spouse may receive this benefit after receiving benefits under subdivision (2) of this subsection;

(2) A surviving spouse who has in his or her care an unmarried dependent child of the deceased member under twenty-two years of age may receive sixty dollars per month plus sixty dollars per month for each child under twenty-two years of age but not more than a total of two hundred forty dollars per month;

(3) If no benefits are payable under subdivision (2) of this subsection, unmarried dependent children under the age of twenty-two may receive sixty dollars each per month; provided that if there are more than three such children one hundred eighty dollars per month shall be divided equally among them;

(4) A dependent parent upon attaining sixty-two years of age may receive sixty dollars per month as long as not remarried provided no benefits are payable at any time under subdivision (1), (2), or (3) of this subsection. If there are two dependent parents entitled to benefits, sixty dollars per month shall be divided equally between them;

(5) If the benefits under this subsection are elected and the total amount paid is less than an amount equal to the accumulated contributions of a member at his death, the difference shall be payable to the beneficiary or the estate of the beneficiary last entitled to benefits.

16. If a retired member dies while receiving a disability retirement allowance, the surviving spouse and children, if any, shall receive benefits under subsection 15 of this section to the same extent as if he had died while an employee, unless such member elected optional benefits under subsection 11 of this section.

17. Should a service retirant again become a member, his retirement allowance payments shall cease during such membership and shall be resumed upon subsequent retirement together with such retirement allowance as shall accrue by reason of his latest period of membership. A retirant may not receive a retirement allowance payment in any month for which he receives compensation from an employing board, except he may serve as a part-time or temporary employee for not to exceed sixty days in any school year without becoming a member and without having his retirement allowance discontinued. A retirant may also serve as a member of the board of trustees and receive any compensation and reimbursement for expenses allowed him because of such service without becoming a member and without having his retirement allowance discontinued or reduced.

18. Upon approval of the board of trustees, any member may make contributions in addition to those required. Any additional contributions shall be accumulated at interest and paid in addition to the benefits provided hereunder. The board of trustees shall make such rules and regulations as it deems appropriate in connection with additional contributions including limitations on amounts of contributions and methods of payment of benefits.

19. Notwithstanding any other provisions of this section, any member retiring on or after age sixty-five who shall have five or more years of creditable service shall be entitled to an annual service retirement allowance of the lesser of (a) an amount equal to his number of years of creditable service multiplied by one hundred twenty dollars, or (b) one thousand eight hundred dollars. Upon the death of such member, any benefits payable to the beneficiary of such member shall be computed as otherwise provided.

20. Notwithstanding any other provisions of this section, any member who continues his employment with an employing board after attaining seventy and one-half years of age shall receive service retirement benefits during the continuation of his employment if and to the extent the payment of such service retirement benefits is required by the Internal Revenue Code of 1986, as amended, and Treasury regulations promulgated thereunder; and such service retirement benefits shall be adjusted annually for additional benefits which shall accrue by reason of such continued employment in accordance with the rules and regulations of the board of trustees. Optional benefits under subsection 11 of this section must be elected by a member prior to the commencement of benefits hereunder.

169.471. 1. Notwithstanding any other provision of law to the contrary, upon the approval of the board of trustees, any member who is receiving or hereafter may receive retirement benefits under the provisions of sections 169.410 to 169.540, upon application to the board of trustees may be made, constituted, appointed and employed by the board as a special consultant on the problems of retirement, aging, and other matters, for the remainder of the person's life, and upon request of the board give opinions in writing, or orally, in response to such requests, as may be required. Any person so employed may receive, in addition to all other compensation provided by law, an increase in compensation each year, computed upon the total amount which the consultant received in the previous year of eighty percent of the increase in the consumer price index calculated in the manner hereinafter provided. Such an annual benefit increase, however, shall not exceed five percent, nor be less than four percent, and the total increase in the amount of benefits received pursuant to the provisions of this section shall not exceed sixty-five percent of the initial benefit which the member received upon retirement.

2. An annual increase, if any is due, shall be payable monthly beginning on a date specified by the board. Nothing in this section shall be construed to prohibit a member from waiving the member's right to receive the annual increase provided pursuant to this section. However, the waiver may not extend beyond the age permitted by the Tax Equity and Fiscal Responsibility Act (TEFRA). The waiver shall be final as to the annual increase waived.