SB 0213 - Fiscal Note

Fiscal Note - SB 0213 - Changes portions of the Sheriffs' Retirement Plan

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 0930-01

BILL NO.: Truly Agreed to and Finally Passed SB 213

SUBJECT: Sheriffs' Retirement System

TYPE: Original

DATE: April 20, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None	$0	$0	$0
Total Estimated Net Effect on All State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Local Government*	$0*	$0*	$0*

*DOES NOT REFLECT COSTS TO SHERIFFS' RETIREMENT SYSTEM, WHICH ARE NOT CONSIDERED LOCAL FUNDS FOR FISCAL NOTE PURPOSES.

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Joint Committee on Public Employee Retirement have reviewed this proposal and have determined that it represents a "substantial proposed change" in future plan benefits as defined in section 105.660(5), RSMo. Therefore, an actuarial cost statement must be provided prior to final action on this legislation by either legislative body or committee thereof.

Officials of the Office of Administration assume that fiscal impact would be determined by the Sheriffs' Retirement System.

Sheriffs' Retirement System officials assume that the proposal provides for two changes to the plan's provisions as follows: 1) It would provide for benefit increases arising from the annual cost-of-living (COLA) increases to not exceed 5% annually and would eliminate the overall 50% cumulative total benefit increase, and 2) the maximum medical insurance premium paid each month to retired members, contributions permitting, would be increased from $300 to $450 per month. The system's actuary determined that the approximate additional annual cost of establishing the annual COLA cap and removing the cumulative COLA cap would be $236,201. Based on the projected number of retirees and the current financial position of the system (payment is dependent on the system's financial position), officials estimate an increase in total annual medical insurance premiums of $136,800. The total increases in annual costs to the system are estimated to be $373,001 for calendar year 2000, $409,001 for calendar year 2001, and $412,601 for calendar year 2002. Officials indicate that the system is adequately funded to cover the cost of these changes (based on the most recent actuarial valuation data, the system is overfunded).

Oversight notes that while there are costs to the Sheriffs' Retirement System, the system's funds are not considered local funds for fiscal note purposes. In addition, the only contributions to the system are court costs, the portion of which are used to fund the system is established by statute. No increases in contributions can be assessed without legislative change. Therefore, the fiscal note reflects no local costs as a result of this proposal.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
	0*	0*	0*
*DOES NOT REFLECT COSTS TO SHERIFFS' RETIREMENT SYSTEM, WHICH ARE NOT CONSIDERED LOCAL FUNDS FOR FISCAL NOTE PURPOSES.
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

The proposal would make two changes to the Sheriffs' Retirement System as follows: 1) It would provide for benefit increases arising from the annual cost-of-living (COLA) increases to not exceed 5% annually and would eliminate the overall 50% cumulative total benefit increase, and 2) the maximum medical insurance premium paid each month to retired members, contributions permitting, would be increased from $300 to $450 per month.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Joint Committee on Public Employee Retirement

Office of Administration

Sheriffs' Retirement System

Jeanne Jarrett, CPA

Director

April 20, 1999