HCS HB 660 -- PUBLIC SCHOOL RETIREMENT SYSTEMS (Hagan-Harrell)

This substitute revises the public school retirement systems.

PUBLIC SCHOOL RETIREMENT

The substitute makes several changes in the Public School
Retirement System.  The substitute:

(1)  Increases the benefit formula multiplier to 2.55% for each
year of service beyond 31 years beginning July 1, 2001, to July
1, 2008, regardless of age;

(2)  Requires the cost-of-living adjustment to begin with the
second, as opposed to the third, January following retirement
after July 1, 2008; and

(3)  Increases member benefits by $3 per year of creditable
service for members retiring before July 1, 2001.

The substitute also contains increases in benefits for the
Non-Teacher School Employee Retirement System effective July 1,
2001.  The substitute:

(1)  Increases the formula factor from 1.51% to 1.61% with
coordinating adjustments to the 25 and out formula factor;

(2)  Increases the temporary benefit from .4% to .8%;

(3)  Raises the cost-of-living cap from 75% to 80% of the
retirement allowance; and

(4)  Increases the one-time benefit from 3.4% to 7.1%.

This portion of the substitute has an emergency clause and is
effective on July 1, 2001, or upon passage and approval,
whichever occurs later.

The substitute also extends to surviving spouses of members of
the Public School Retirement System who remarried before August
28, 1995, any remaining benefits.  The substitute prohibits
retroactive benefits.

KANSAS CITY PUBLIC SCHOOL RETIREMENT SYSTEMS

In revisions to the Kansas City Public School Retirement
Systems, the substitute:

(1)  Clarifies the relationship of charter school employees to
the retirement system.  Charter school employees will be
considered public school employees for purposes of retirement.
If a school system lapses, charter school personnel will
continue to participate in the retirement system as they did
before the lapse;

(2)  Adds the lapse of the corporate structure of the district
to the list of contingencies faced by the school retirement
system and clarifies that the retirement system will continue to
be governed by existing statute and rule;

(3)  Revises requirements for board membership to anticipate the
consequences of loss of members appointed by the school board
from the retirement system's governing board;

(4)  Prohibits the transfer of assets or merger of the
retirement system upon lapse of the district without the
approval of the retirement system board;

(5)  Raises the current limit of 530 hours on reemployment after
retirement without loss of benefits to 600 hours; and

(6)  Adds provisions concerning the reemployment of retired
members that clarify that the amount of the pension attributable
to the person's first period of employment will not be changed
by reemployment; but if the person becomes an active member and
earns more creditable service and retires a second time, the
person's pension will be the pension the person was receiving
when he or she was reeemployed plus the amount of any increase
the person would have gotten if pension payments had not been
suspended and an additional pension using the formula in effect
on the date of the person's second retirement, using the
creditable service and the final average compensations from the
second period of employment.  If an inactive member becomes an
active member after June 30, 2001, the person's pension will be
calculated separately for each separate period ending with a
break in service, unless the person earns at least 4 years of
creditable service without a break.

ST. LOUIS PUBLIC SCHOOL RETIREMENT SYSTEM

The substitute makes changes in the St. Louis Public School
Retirement System.  The substitute:

(1)  Defines "charter schools" and includes charter schools in
the definition of public schools to include the participation of
charter school employees in the system;

(2)  Defines "retired member" and further defines "active
member" and "inactive member";

(3)  Clarifies laws that allow members to purchase pension
credit for various kinds of service;

(4)  Allows members of the Board of Education to serve as
members of the retirement system Board of Trustees;

(5)  Authorizes the board to continue to function in the event
of lapses in the school district's corporate organization;

(6)  Increases the period during which a member can apply for a
pension from 90 to 180 days;

(7)  Increases the pension benefit formula multiplier from 1.25%
to 2%;

(8)  Increases the period during which a member can apply for a
disability pension from 90 to 180 days.  Social Security
disability awards are also accepted as an alternative standard
for disability pension approval;

(9)  Requires payment to a member with fewer than 5 years of
service who ceases to be employed, except by death, of the
amount of accumulated contributions.  The payment must be made
in accordance with the Internal Revenue Code;

(10)  Adds a benefit payment option that allows a member to
receive an actuarially equivalent benefit that is higher prior
to age 62 and lower after age 62;

(11)  Repeals language which requires that a member's account
not be credited with annual interest after the date benefits
were first due and payable;

(12)  Allows retired members to continue to receive benefits and
compensation for employment under Section 105.269, RSMo, as
volunteer tutors;

(13)  Requires special advisor payments to be paid as
cost-of-living benefits rather than as expenses of the
retirement system;

(14)  Deletes the requirement that the board of trustees elect a
treasurer;

(15)  Repeals language requiring the annual valuation to be
based on the unfunded liability;

(16)  Changes the amortization schedule for the unfunded
liability from 50 years to a period not to exceed 30 years;

(17)  Allows the board of trustees to adopt an actuarial method
that is appropriate for the system's funded status;

(18)  Allows the system to recognize child support orders issued
through the Division of Child Support Enforcement involving
retired members; and

(19)  Updates and deletes obsolete language.

The substitute also defines spouse for purposes of teacher and
public school employee retirement systems as a person of the
opposite sex.

FISCAL NOTE:  No impact on state funds.

Missouri House of Representatives
Last Updated November 26, 2001 at 11:45 am