SB 407 - This act modifies provisions relating to public employee retirement systems. MISSOURI DEPARTMENT OF TRANSPORTATION AND HIGHWAY PATROL EMPLOYEES' RETIREMENT SYSTEM (SECTIONS 104.010, 104.020, 104.035, 104.090, 104.130, AND 104.170) This act provides that the Board of Trustees of the Missouri Department of Transportation and Highway Patrol Employees' Retirement System ("MPERS") may further define the term "compensation" in a manner consistent with current law. Additionally, this act modifies the sectional references for provisions applicable to MPERS. This act repeals the requirement of one continuous year of service for purposes of restoration of prior service periods for those terminated members of MPERS entitled to a deferred normal annuity who reenter service. Additionally, this act repeals the availability of reelection of joint and survivor benefits within one year of a new marriage for those members whose annuities have reverted to a single life annuity following the death of a spouse and have been made a special consultant of the Board. Further, this act repeals the provision relating to the requirement of the Board of MPERS to pay a retired member's designated beneficiaries or estate a death benefit equal to the excess of accumulated member contributions over the total amount of retirement benefits received. The election of chair and vice-chair of the Board by secret ballot is also repealed by this act. ERROR CORRECTIONS (SECTIONS 104.200, 104.490, AND 104.1060) Currently, the Board of MPERS and the Board of the Missouri State Employees' Retirement System ("MOSERS") shall correct an error that has resulted in a member or beneficiary receiving more or less than entitled if the system discovers or is notified of such error within ten years after the initial date of the error. This act provides that no error shall be corrected unless the system discovers or is notified within ten years after the later of the member's annuity starting date or the date of error. However, in cases of fraud, any error shall be corrected. DIVISION OF BENEFITS IN DISSOLUTION OF MARRIAGE ACTIONS (SECTIONS 104.312, 104.625(4), 104.1024.6(4), AND 104.1051) This act provides that unused sick leave credited to a member of MPERS or MOSERS shall be excluded in the monthly amount paid to the alternate payee or former spouse for a division of benefits order in a dissolution of marriage action. Additionally, this act specifies that annual benefit increases paid after the member's annuity starting date shall not be considered an increase accrued after the termination of the marriage and shall be counted as part of the monthly amount subject to division. For a member who has not been paid retirement benefits and continues employment for at least two years beyond normal retirement age, any service or compensation between the retroactive starting date and the annuity starting date shall not be considered creditable service or compensation. Additionally, any lump sum payment elected by a member who has not been paid retirement benefits and continues employment for at least two years beyond normal retirement age shall not be subject to any division of benefits order. DISABILITY BENEFITS FOR MEMBERS OF THE GENERAL ASSEMBLY AND STATEWIDE ELECTED OFFICIALS (SECTIONS 104.410 AND 104.1084) Members of the General Assembly and statewide elected officials who qualify for disability shall continue to accrue service until the earliest of attainment of normal retirement eligibility, termination of disability benefits, or the end of his or her constitutionally mandated limit on service for the particular chamber of the General Assembly or office in which he or she was serving at the time of the disablement. ACTUARIAL AMORTIZATION AND COST METHODS (SECTIONS 104.436 AND 104.1066) Currently, MOSERS and, under the Year 2000 Plan, MPERS shall use the entry age normal cost valuation method for normal cost calculations and shall use the level percent-of-payroll amortization for determinations of contributions for unfunded accrued liabilities. This act repeals the use of the level percent-of-payroll and provides only for the entry age normal cost valuation method to be used in determining the normal cost calculation. This provision is identical to SB 77 (2023). SPECIAL CONSULTANTS OF MISSOURI STATE EMPLOYEES' RETIREMENT SYSTEM (SECTIONS 104.515 AND 104.1072) This act provides that special consultants of the Board of Trustees of MPERS or MOSERS who have reached a normal or early retirement age and become a retiree within 65 days, instead of 60 days, shall receive $5,000 of life insurance coverage. ANNUITIES AND LUMP SUM PAYMENTS (SECTIONS 104.625(3) AND 104.1024.6(3)) A member who has not been paid retirement benefits and continues employment for at least two years beyond normal retirement age may currently elect to receive lump sum amounts in its entirety or in three equal annual installments. This act repeals the availability of lump sum payments in installments. WATER PATROL EMPLOYEES (SECTION 104.810) If an employee of the Missouri State Water Patrol who earned creditable service in the closed plan of MOSERS and who was eligible to transfer membership to the closed plan of MPERS has terminated his or her position and subsequently returns to the same position, the employee will be a member of the system in which he or she was a member prior to termination. If the employee returned to any other position, the employee shall be a member of the system that currently covers that position. YEAR 2000 PLAN (SECTIONS 104.1003, 104.1018, 104.1024 AND 104.1091) This act repeals the term "year" as it relates to the term "employee" when describing persons employed in positions requiring the performance of duties of not less than one thousand forty hours per year. This act also corrects a sectional reference to mandatory retirement for members of the Missouri Highway Patrol. Additionally, this act provides that the Board of Trustees for the respective system may further define the term "pay" in a manner consistent with current law. This act provides that any vested former member who terminated employment after attaining normal retirement eligibility shall be considered a member of the retirement system entitled to certain annuities under the Year 2000 plan. The act provides that the calculation for the life annuity paid under the Year 2000 Plan for individuals with credited service not covered by Social Security is for certain teachers of state agencies, universities, or the Department of Elementary and Secondary Education who have credited service not covered by Social Security. Currently, vested former members are not eligible for early retirement. This act modifies the provision to provide that only those vested former members who terminate employment prior to the attainment of early retirement eligibility are not eligible for such early retirement. Additionally, a refund of contributions requested by a former member currently shall be paid by the system after 90 days from the later of either the date of termination or the date of request. This act provides that such a refund, which shall include all employee contributions, shall be paid by the system within an administratively reasonable period, but no sooner than 90 days after the date of termination. Furthermore, a former member who receives a refund shall not be eligible to receive any disability benefits, instead of long-term disability benefits. This act provides that those vested former members who terminated employment after attainment of normal retirement eligibility shall be covered by a member's normal retirement eligibility. Additionally, current law provides that the survivor annuity payable for vested former members is not payable until the deceased member would have reached normal retirement eligibility. This act provides that such survivor annuity is not payable until such time for those vested former members who terminated employment prior to early retirement eligibility. Further, this act provides that the current annual cost-of-living adjustments, which shall not commence until the second anniversary of the annuity starting date, applies only to vested former members who terminated employment prior to the attainment of early retirement eligibility. RETIREMENT OF JUDGES (SECTION 476.521) Currently, for judges hired after January 1, 2011, his or her contributions are refunded with four percent interest per year. Beginning June 30, 2022, the interest rate is changed so that it is equal to the investment rate for the fifty-two week treasury bills issued by the United States Department of the Treasury. Additionally, the interest rate shall cease upon retirement or death of the judge. A beneficiary of any judge who contributed to the system currently receives a refund upon the judge's death based on the amount of such contributions. This act provides that the interest credited to such contributions shall be included in the refund calculation. This act is identical to provisions in the truly agreed to and finally passed CCS/SB 20 (2023) and in SCS/HCS/HB 934 (2023), is substantially similar to provisions in the truly agreed to and finally passed HCS/SS/SB 75 (2023), in the perfected HCS/HB 155 (2023), HB 1185 (2023), HB 2234 (2022), and in HB 2799 (2022), and is similar to HB 701 (2021), SB 901 (2020), HCS/HB 1999 (2020), and HB 1105 (2019). KATIE O'BRIEN