COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1501-02
Bill No.: SB 389
Subject: Education, Higher; Retirement Systems
Type: Original
Date: February 20, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Various State Funds | $0 | unknown | unknown |
| Total Estimated
Net Effect on All State Funds |
$0 | unknown | unknown |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 3 pages.
ASSUMPTION
Officials with the Joint Committee on Public Employee Retirement indicate that the legislation does not represent a "substantial proposed change" in future plan benefits, and that an actuarial cost statement is not required.
Officials with the Office of Administration assume that the Missouri State Employees' Retirement System should determine the cost of the proposal.
The Missouri State Employees' Retirement System (MOSERS) indicates that this proposal will be cost-neutral. The proposed legislation would establish a defined contribution plan for faculty & senior administrative personnel at regional colleges & universities hired after June 30, 2002. Contributions are to be set at 1% less than the normal cost rate established for the general population of employees participating in MOSERS. The rate would change year to year for the defined contribution plan, corresponding to year to year changes in the defined benefit plan.
Officials with Central Missouri State University and Missouri Southern State College assumed the fiscal impact to the school is unknown.
Officials with Harris-Stowe State College and Linn State Technical College assumed there would be no fiscal impact to the school.
Southwest Missouri State University (SMS) assumed the proposal would provide savings of 1% of pay for faculty and senior administration officials hired after June 30, 2002. SMS estimated 70 new hires per year at $56,667 per year, providing savings of $39,667 in FY 2003 (70 x $56,667 x 1%). For FY 2004, new hires from FY 2003, plus FY 2004 hires were assumed to have an average salary of $58,934 (4% adjustment), for a total savings for the year of $83,508 (140 x $58,934 x 1%).
Oversight assumes there will be unknown savings to the state institutions.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| Savings-Various State Funds | |||
| MOSERS Contributions for New Employees | $0 | unknown | unknown |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This act would create a defined contribution plan for state colleges and universities for teaching personnel, instructors, assistant professors, associate professors, professors, and academic administrators holding faculty rank. MOSERS is authorized to establish the plan, select a third party administrator, select investment products, and establish contribution rates.
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
Missouri State Employees' Retirement System
Central Missouri State University
Harris-Stowe State College
Linn State Technical College
Missouri Southern State College
Southwest Missouri State University
NOT RESPONDING
Lincoln University
Missouri Western State College
Northwest Missouri State University
Southeast Missouri State University
Truman State University
Jeanne Jarrett, CPA
Director
February 20, 2001