HCS HB 736, 515 & 508 -- PUBLIC SCHOOL RETIREMENT SYSTEMS
(Hagan-Harrell)

This substitute makes several changes in the teachers' and
nonteachers' retirement systems.

TEACHERS.  The definition of final average salary is changed
from 5 to 3 years.  The rule of 80 (years of creditable service
plus age) is added to the provisions on eligibility for
retirement.  Currently, the surviving spouse is eligible for
certain survivor options; the substitute changes "spouse" to a
person named by the member as the primary beneficiary with an
insurable interest in the life of the deceased member.  Minimum
benefit provisions are extended to beneficiaries.  The
substitute extends the current $2 per month times years of
service benefit to the beneficiaries of retired members who died
before the effective date of the substitute and, as of September
1, 1999, to beneficiaries of deceased members.  The current
limit of $60 per month applies.  A new benefit of $5 per month
times years of service is added for persons retired before the
effective date of the substitute and the beneficiaries of
retired members who died before the effective date of the
substitute.  A $5,000 death benefit for any member who has
retired is created.  Monthly minimum and maximum surviving
spouse and dependent child benefits are increased, a definite
minimum payment of $300 for the surviving spouse is created, and
children in school full-time are eligible to age 24, rather than
22.  Surviving parent benefits are also increased.

Under current law, retired teachers may work on a part-time or
temporary-substitute basis for up to 550 hours per school year;
this substitute adds that a retired teacher may earn up to 50%
of the annual compensation payable under the district's salary
schedule for the position filled by the retiree and also
provides means for determining salary for a position not on the
schedule, for newly created positions, and for retirees filling
multiple positions.

NONTEACHERS.  This substitute raises the multiplier for
nonteacher retirement benefits from 1.35 to 1.45 percent of the
member's final average salary.  The multiplier for members who
retire between July 1, 1996, and July 1, 2000, with less than 30
years of service but more than 25 years also will be increased
by ten-hundredths of a percent.  Currently, the spouse of a
member under certain conditions may elect to receive
survivorship benefits or payment of accumulated contributions.
The phrase "primary beneficiary" with an insurable interest in
the life of the deceased member is substituted for the word
"spouse."  Members who retired before the effective date of the
substitute and the designated beneficiaries of deceased retired
members may be made special consultants, to receive a payment
equal to 7.4% of the previous month's benefit which will not be
subject to the cost-of-living cap.

The substitute also makes a change to the nonteacher system for
certain members who were certified as vocational-technical
teachers by making the basis for certification a degree or work
experience instead of a degree and work experience, making these
provisions identical to the teachers' system requirements.

BOTH SYSTEMS.  In a new section, the substitute permits retired
teachers and nonteachers, except those retired on disability, to
establish a second or subsequent membership in the system after
a one-year vesting period.  Such membership is separate and not
combinable for service credit or benefits with a previous
membership.  Such members will not draw a benefit from their
first membership while in covered employment.

The substitute has an emergency clause.

FISCAL NOTE:  No impact on state funds.

HCS HB 736, 515 & 508 -- PUBLIC SCHOOL RETIREMENT SYSTEMS

SPONSOR:  Hagan-Harrell

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Retirement by a vote of 9 to 1.

This substitute makes several changes in the teachers' and
nonteachers' retirement systems.

TEACHERS.  The definition of final average salary is changed
from 5 to 3 years.  The rule of 80 (years of creditable service
plus age) is added to the provisions on eligibility for
retirement.  Currently, the surviving spouse is eligible for
certain survivor options; the substitute changes "spouse" to a
person named by the member as the primary beneficiary with an
insurable interest in the life of the deceased member.  Minimum
benefit provisions are extended to beneficiaries.  The
substitute extends the current $2 per month times years of
service benefit to the beneficiaries of retired members who died
before the effective date of the substitute and, as of September
1, 1999, to beneficiaries of deceased members.  The current
limit of $60 per month applies.  A new benefit of $5 per month
times years of service is added for persons retired before the
effective date of the substitute and the beneficiaries of
retired members who died before the effective date of the
substitute.  A $5,000 death benefit for any member who has
retired is created.  Monthly minimum and maximum surviving
spouse and dependent child benefits are increased, a definite
minimum payment of $300 for the surviving spouse is created, and
children in school full-time are eligible to age 24, rather than
22.  Surviving parent benefits are also increased.

Under current law, retired teachers may work on a part-time or
temporary-substitute basis for up to 550 hours per school year;
this substitute adds that a retired teacher may earn up to 50%
of the annual compensation payable under the district's salary
schedule for the position filled by the retiree and also
provides means for determining salary for a position not on the
schedule, for newly created positions, and for retirees filling
multiple positions.

NONTEACHERS.  This substitute raises the multiplier for
nonteacher retirement benefits from 1.35 to 1.45 percent of the
member's final average salary.  The multiplier for members who
retire between July 1, 1996, and July 1, 2000, with less than 30
years of service but more than 25 years also will be increased
by ten-hundredths of a percent.  Currently, the spouse of a
member under certain conditions may elect to receive
survivorship benefits or payment of accumulated contributions.
The phrase "primary beneficiary" with an insurable interest in
the life of the deceased member is substituted for the word
"spouse."  Members who retired before the effective date of the
substitute and the designated beneficiaries of deceased retired
members may be made special consultants, to receive a payment
equal to 7.4% of the previous month's benefit which will not be
subject to the cost-of-living cap.

The substitute also makes a change to the nonteacher system for
certain members who were certified as vocational-technical
teachers by making the basis for certification a degree or work
experience instead of a degree and work experience, making these
provisions identical to the teachers' system requirements.

BOTH SYSTEMS.  In a new section, the substitute permits retired
teachers and nonteachers, except those retired on disability, to
establish a second or subsequent membership in the system after
a one-year vesting period.  Such membership is separate and not
combinable for service credit or benefits with a previous
membership.  Such members will not draw a benefit from their
first membership while in covered employment.

The substitute has an emergency clause.

FISCAL NOTE:  No impact on state funds.

PROPONENTS:  Supporters of HB 736 say that a coalition of
education organizations looked at the $508 million overfunding
of the teachers' system and agreed to the additional benefits on
the principle that if the system is overfunded, the money should
be returned to the members in a fiscally responsible way.  The
$5,000 death benefit received special attention as a well--
deserved benefit; the increased benefits to current retirees
also drew commendations.

Supporters of HB 515 say that a coalition of 14 educational
organizations formed last summer to advocate for better benefits
for nonteachers.  Benefits for nonteachers are a high priority
this year.

Supporters of HB 508 say it is time to provide higher survivor
benefits; a similar bill was before the committee last year.

Testifying for HB 736 were Representative Hagan-Harrell; Public
School Retirement System; Missouri Council of School
Administrators; Missouri State Teachers Association; Missouri
NEA; Missouri Federation of Teachers; Missouri Retired Teachers
Association; and Missouri Association of Community Colleges.

Testifying for HB 515 were Representative Relford; Roger Kurtz,
representing the 14-member coalition; Missouri Association of
School Nurses; Missouri Retired Teachers Association; Missouri
Council of School Administrators; Missouri Association of
Secondary School Principals; Missouri Federation of Teachers;
Missouri State Teachers Association; American Association of
Retired People; Metropolitan Community Colleges; Missouri
Community College Association; Missouri NEA; and Public School
Retirement System.

Testifying for HB 508 were Representative Froelker; Missouri
State Teachers Association; and American Association of Retired
People.

OPPONENTS:  There was no opposition voiced to the committee.

Becky DeNeve, Legislative Analyst

HB 736 -- Public School Retirement System

Co-Sponsors:  Hagan-Harrell, Franklin, Kreider, Fitzwater, Gaw,
Farnen, Crump

This bill makes several changes in the teachers' retirement
system.  The definition of final average salary is changed from
its current 5 years to 3 years.  The rule of 80 (years of
creditable service plus age) is added to the provisions on
eligibility for retirement.  Currently, the surviving spouse is
eligible for certain survivor options; the bill changes "spouse"
to a person named by the member as the primary beneficiary with
an insurable interest in the life of the deceased member.
Minimum benefit provisions are extended to beneficiaries.  The
bill extends the current $2 per month times years of service
benefit to the beneficiaries of retired members who died before
the effective date of the bill and, as of September 1, 1999, to
beneficiaries of deceased members.  The current limit of $60 per
month applies.  A new benefit of $5 per month times years of
service is added for persons retired before the effective date
of the bill and the beneficiaries of retired members who died
before the effective date of the bill.  A $5,000 death benefit
for any member who has retired is created.  Monthly minimum and
maximum surviving spouse and dependent child benefits are
increased, a definite minimum payment of $300 for the surviving
spouse is created, and children in school full-time are eligible
to age 24, rather than 22.  Surviving parent benefits are also
increased.

The bill has an emergency clause.