Bill Text: MO HB282 | 2011 | Regular Session | Comm Sub
Bill Title: Changes the laws regarding public employee retirement
Spectrum: Bipartisan Bill
Status: (Passed) 2011-07-08 - Delivered to Secretary of State (G) [HB282 Detail]
Download: Missouri-2011-HB282-Comm_Sub.html
FIRST REGULAR SESSION
SENATE COMMITTEE SUBSTITUTE FOR
HOUSE BILL NO. 282
96TH GENERAL ASSEMBLY
Reported from the Committee on Veterans' Affairs, Emerging Issues, Pensions and Urban Affairs, April 27, 2011, with recommendation that the Senate Committee Substitute do pass.
TERRY L. SPIELER, Secretary.
1055S.03C
AN ACT
To repeal sections 70.710, 70.720, 70.730, 105.915, and 105.927, RSMo, and to enact in lieu thereof six new sections relating to public employee retirement.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Sections 70.710, 70.720, 70.730, 105.915, and 105.927, RSMo, are repealed and six new sections enacted in lieu thereof, to be known as sections 70.710, 70.720, 70.730, 104.603, 105.915, and 105.927, to read as follows:
70.710. 1. The "Employer Accumulation Fund" is hereby created. It is the fund in which shall be accumulated the contributions made by employers for benefits, and from which shall be made transfers, as provided in sections 70.600 to 70.755.
2. When paid to the system, the employer contributions provided for in subsections 2 and 3 of section 70.730 shall be credited to the employer accumulation fund account of the employer making the contributions.
3. When an allowance other than a disability allowance or an allowance that results from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee first becomes due and payable, there shall be transferred to the benefit reserve fund from his employer's account in the employer accumulation fund the difference between the reserve for the allowance and the accumulated contributions standing to his credit in the members deposit fund at the time the allowance first becomes due and payable, of the member or former member to whom or on whose behalf the allowance is payable.
4. A separate account shall be maintained in the employer accumulation fund for each employer. No employer shall be responsible for the employer accumulation fund liabilities of another employer.
5. When a disability allowance or an allowance that results from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee first becomes due and payable, the accrued service pension reserve covering the retiring member shall be calculated in the manner provided for in subsection 3 of section 70.730, as of the effective date of the disability allowance. Such reserve shall be transferred to the benefit reserve fund from the employer's account in the employer accumulation fund.
70.720. 1. The "Casualty Reserve Fund" is hereby created. It is the fund in which shall be accumulated the contributions made by employers for pensions either to be paid members who retire on account of disability or that result from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee, and from which shall be made transfers as provided in sections 70.600 to 70.755.
2. When paid to the system, the employer contributions provided for in subsection 4 of section 70.730 shall be credited to the casualty reserve fund.
3. When a disability allowance or an allowance that results from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee first becomes due and payable, there shall be transferred to the benefit reserve fund from the casualty reserve fund an amount equal to the reserve for the allowance, minus:
(1) The accumulated contributions, standing to the member's credit in the members deposit fund at the time the allowance first becomes due and payable; and
(2) The accrued service pension reserve determined pursuant to subsection 5 of section 70.710.
70.730. 1. Each employer's contributions to the system shall be the total of the contribution amounts provided for in subsections 2 through 5 of this section; provided, that such contributions shall be subject to the provisions of subsection 6 of this section.
2. An employer's normal cost contributions shall be determined as follows: Using the financial assumptions adopted by the board from time to time, the actuary shall annually compute the rate of contributions which, if paid annually by each employer during the total service of its members, will be sufficient to provide the pension reserves required at the time of their retirements to cover the pensions to which they might be entitled or which might be payable on their behalf. The board shall annually certify to the governing body of each employer the amount of membership service contribution so determined, and each employer shall pay such amount to the system during the employer's next fiscal year which begins six months or more after the date of such board certification. Such payments shall be made in such manner and form and in such frequency and shall be accompanied by such supporting data as the board shall from time to time determine. When received, such payments shall be credited to the employer's account in the employer accumulation fund.
3. An employer's accrued service contributions shall be determined as follows: Using the financial assumptions adopted by the board from time to time, the actuary shall annually compute for each employer the portions of pension reserves for pensions which will not be provided by future normal cost contributions. The accrued service pension reserves so determined for each employer less the employer's applicable balance in the employer accumulation fund shall be amortized over a period of years, as determined by the board. Such period of years shall not extend beyond the latest of (1) forty years from the date the political subdivision became an employer, or (2) thirty years from the date the employer last elected to increase its optional benefit program, or (3) fifteen years from the date of the annual actuarial computation. The board shall annually certify to the governing body of each employer the amount of accrued service contribution so determined for the employer, and each employer shall pay such amount to the system during the employer's next fiscal year which begins six months or more after the date of such board certification. Such payments shall be made in such manner and form and in such frequency and shall be accompanied by such supporting data as the board shall from time to time determine. When received, such payments shall be credited to the employer's account in the employer accumulation fund.
4. The employer's contributions for the portions of disability pensions or pensions that result from a member's death that was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee not covered by accrued service pension reserves shall be determined on a one-year term basis. The board may determine different rates of contributions for employers having policeman members or having fireman members or having neither policeman members nor fireman members. The board shall annually certify to the governing body of each employer the amount of contribution so ascertained for the employer, and each employer shall pay such amount to the system during the employer's next fiscal year which begins six months or more after the date of such board certification. Such payments shall be made in such manner and form and in such frequency and shall be accompanied by such supporting data as the board shall from time to time ascertain. When received, such payments shall be credited to the casualty reserve fund.
5. Each employer shall provide its share, as determined by the board, of the administrative expenses of the system and shall pay the same to the system to be credited to the income-expense fund.
6. The employer's total contribution to the system, expressed as a percent of active member compensations, in any employer fiscal year, beginning with the second fiscal year that the political subdivision is an employer, shall not exceed its total contributions for the immediately preceding fiscal year, expressed as a percent of active member compensations, by more than one percent.
104.603. 1. Effective with transfers of service between the Missouri department of transportation and highway patrol employees' retirement system and the Missouri state employees' retirement system that occur on or after September 1, 2011, upon a reciprocal transfer of creditable or credited service pursuant to section 104.602 or subsection 8 of section 104.1021, the sending system from which the service is transferred shall pay the receiving system to which the service is transferred the present value of the accrued benefit as determined pursuant to subsection 2 of this section.
2. For purposes of this section, the present value of the accrued benefit shall be determined using the actuarial assumptions of the sending system used in that system's last regular valuation assuming active member status and using the unit credit actuarial cost method. However, in no event shall the payment amount be less than the sum of the member's accumulated contributions and interest plus any purchased service payments from the member held on deposit by the sending system. If the member had received a refund of accumulated contributions from the sending system and forfeited service credit with that system, the member would need to reestablish that service with the sending system by again becoming an active member of a system covered by this chapter and satisfying requirements otherwise stipulated for reestablishing service credit.
3. The service transfer shall not be deemed completed until the sending system makes payment to the receiving system as prescribed in this section. Payments shall be made within ninety days of the date that a completed transfer request is submitted by a member.
4. When the transfer payment includes an amount identified as corresponding to a member's accumulated contributions, the accumulated contributions portion shall be identified, and further, the accumulated contributions balance as of the preceding July first shall be identified and the receiving system shall be responsible for crediting interest according to the terms of the receiving plan.
5. The systems shall coordinate their plan administration for reciprocal transfers to give full effect to the transfer including the transfer and acceptance of corresponding division of benefit orders.
6. The member or survivor obtaining a reciprocal transfer of service covered by this section shall satisfy all requirements under section 104.602 or subsection 8 of section 104.1021 to obtain a transfer of credited or creditable service and shall satisfy the requirements under section 104.1091 with the receiving system to reestablish forfeited service previously accrued at either system.
105.915. 1. The board of trustees of the Missouri state employees' retirement system shall administer the deferred compensation fund for the employees of the state of Missouri that was previously administered by the deferred compensation commission, as established in section 105.910, prior to August 28, 2007. The board shall be vested with the same powers that it has under chapter 104 to enable it and its officers, employees, and agents to administer the fund under sections 105.900 to 105.927. Two of the commissioners serving on the deferred compensation commission immediately prior to the transfer made to the board under section 105.910 shall serve as ex officio members of the board solely to participate in the duties of administering the deferred compensation fund. One such commissioner serving as an ex officio board member shall be a member of the house of representatives selected by the speaker of the house of representatives, and such commissioner's service on the board shall cease on December 31, 2009. The other commissioner serving as an ex officio board member shall be the chairman of the deferred compensation commission immediately prior to the transfer made to the board under section 105.910, and such commissioner's service on the board shall cease December 31, 2008.
2. Except as provided in this subsection, participation in such plan shall be by a specific written agreement between state employees and the state, which shall provide for the deferral of such amounts of compensation as requested by the employee subject to any limitations imposed under federal law. Participating employees must authorize that such deferrals be made from their wages for the purpose of participation in such program. An election to defer compensation shall be made before the beginning of the month in which the compensation is paid. Contributions shall be made for payroll periods occurring on or after the first day of the month after the election is made. Each employee eligible to participate in the plan hired on or after July 1, 2012, shall be enrolled in the plan automatically and his or her employer shall, in accordance with the plan document, withhold and contribute to the plan an amount equal to one percent of eligible compensation received on and after the date of hire, unless the employee elects not to participate in the plan within the first thirty days of employment, and in that event, any amounts contributed and earnings thereon will be refunded by the plan to the employee pursuant to the procedure contained in the plan documents. Employees who are employed by a state college or university shall not be automatically enrolled but may elect to participate in the plan and make contributions in accordance with the terms of the plan. Employees who are enrolled automatically may elect to change the contribution rate in accordance with the terms of the plan. Employees who elect not to participate in the plan may at a later date elect to participate in the plan and make contributions in accordance with the terms of the plan. All assets and income of such fund shall be held in trust by the board for the exclusive benefit of participants and their beneficiaries. Assets of such trust, and the trust established pursuant to section 105.927, may be pooled solely for investment management purposes with assets of the trust established under section 104.320.
3. Notwithstanding any other provision of sections 105.900 to 105.927, funds held for the state by the board in accordance with written deferred compensation agreements between the state and participating employees may be invested in such investments as are deemed appropriate by the board. All administrative costs of the program described in this section, including staffing and overhead expenses, may be paid out of assets of the fund, which may reduce the amount due participants in the fund. Such investments shall not be construed to be a prohibited use of the general assets of the state.
4. Investments offered under the deferred compensation fund for the employees of the state of Missouri shall be made available at the discretion of the board.
5. The board and employees of the Missouri state employees' retirement system shall be immune from suit and shall not be subject to any claim or liability associated with any administrative actions or decisions made by the commission with regard to the deferred compensation program prior to the transfer made to the board under section 105.910.
6. The board and employees of the system shall not be liable for the investment decisions made or not made by participating employees as long as the board acts with the same skill, prudence, and diligence in the selection and monitoring of providers of investment products, education, advice, or any default investment option, under the circumstances then prevailing that a prudent person acting in a similar capacity and familiar with those matters would use in the conduct of a similar enterprise with similar aims.
7. The system shall be immune from suit and shall not be subject to any claim or liability associated with the administration of the deferred compensation fund by the board and employees of the system.
8. Beginning on or after September 1, 2011, if a participant under the deferred compensation plan or the plan established under section 105.927 is married on the date of his or her death, the participant's surviving spouse shall be automatically designated as the primary beneficiary under both plans, unless the surviving spouse consented in writing, witnessed by a notary public, to allow the participant to designate a nonspouse beneficiary. As used in this subsection, "surviving spouse" means the spouse as defined pursuant to section 104.012 to whom the participant is lawfully married on the date of death of the participant, provided that a former spouse shall be treated as the surviving spouse of the participant to the extent provided under a judgment, decree, or order that relates to child support, alimony payments, or marital property rights made under Missouri domestic relations law that creates or recognizes the existence of such former spouse's right to receive all or a portion expressed as a stated dollar amount or specific percentage stated in integers of the benefits payable from such plan upon the death of the participant. This subsection shall not apply to beneficiary designations made prior to September 1, 2011.
9. The board may adopt and amend plan documents to change the terms and conditions of the deferred compensation plan and the plan established under section 105.927 that are consistent with federal law.
105.927. [1.] The treasurer of the state of Missouri shall credit an amount not to exceed seventy-five dollars per month, to a plan established pursuant to the provisions of the Internal Revenue Code Section 401(a) for each [qualified] participant in the state's deferred compensation program; provided that funds to be credited to each [qualified] participant's account shall not exceed the amount appropriated by the general assembly for each [qualified] participant. Such funds may be credited to each participant directly by a state agency if that agency's payroll is not issued through the treasurer of the state of Missouri. Funds so credited shall be held, administered and invested as provided in sections 105.900 to 105.925 and the plan document adopted for the administration of such contributions.
[2. For purposes of this section, "qualified participant" means an employee of the state of Missouri who is making continuous deferrals of at least twenty-five dollars per month to the deferred compensation program and has been an employee of the state of Missouri for at least twelve consecutive months immediately preceding the commencement of any amount credited pursuant to this section. The amount credited on behalf of a qualified participant pursuant to this section shall not exceed the amount that the qualified participant contributes to his or her deferred compensation plan.]
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