SB 1572 — Modifies provisions relating to public employee retirement systems

A person who knowingly makes a false statement, or falsifies or permits to be falsified a record of the system, in an attempt to defraud the system is subject to fine or imprisonment pursuant to the Missouri revised statutes.

3.

The board of trustees of the Missouri state employees' retirement system shall cease paying benefits to any survivor or beneficiary who is charged with the intentional killing of a member without legal excuse or justification.

A survivor or beneficiary who is convicted of such charge shall no longer be entitled to receive benefits.

If the survivor or beneficiary is not convicted of such charge, the board shall resume payment of benefits HCS SB 1572 6 and shall pay the survivor or beneficiary any benefits that were suspended pending resolution of such charge.

104.1060.

1.

Should any error result in any person receiving more or less than the person would have been entitled to receive had the error not occurred, the board shall correct such error, and, as far as practicable, to recover any overpayments, may accept single sum or installment repayments or make future payments in such a manner that the actuarial equivalent of the annuity to which such person was entitled shall be paid[, and to this end may recover any overpayments].

In all cases in which such error has been made, no such error shall be corrected unless the system discovers or is notified of such error within ten years after the member's annuity starting date or the date of error, whichever occurs later.

In cases of fraud, any error discovered shall be corrected without concern to the amount of time that has passed.

2.

A person who knowingly makes a false statement, or falsifies or permits to be falsified a record of the system, in an attempt to defraud the system shall be subject to fine or imprisonment under the Missouri revised statutes.

3.

A board shall not pay an annuity to any survivor or beneficiary who is charged with the intentional killing of a member, retiree or survivor without legal excuse or justification.

A survivor or beneficiary who is convicted of such charge shall no longer be entitled to receive an annuity.

If the survivor or beneficiary is not convicted of such charge, the board shall resume annuity payments and shall pay the survivor or beneficiary any annuity payments that were suspended pending resolution of such charge.

104.1091.

1.

Notwithstanding any provision of the year 2000 plan to the contrary, each person who first HCS SB 1572 7 becomes an employee on or after January 1, 2011, shall be a member of the year 2000 plan subject to the provisions of this section.

2.

A member's normal retirement eligibility shall be as follows:

(1) The member's attainment of at least age sixty- seven and the completion of at least ten years of credited service;

or the member's attainment of at least age fifty- five with the sum of the member's age and credited service equaling at least ninety;

or, in the case of a member who is serving as a uniformed member of the highway patrol and subject to the mandatory retirement provisions of section 104.081, such member's attainment of at least age sixty or the attainment of at least age fifty-five with ten years of credited service;

(2) For members of the general assembly, the member's attainment of at least age sixty-two and the completion of at least three full biennial assemblies;

or the member's attainment of at least age fifty-five with the sum of the member's age and credited service equaling at least ninety;

(3) For statewide elected officials, the official's attainment of at least age sixty-two and the completion of at least four years of credited service;

or the official's attainment of at least age fifty-five with the sum of the official's age and credited service equaling at least ninety.

3.

A vested former member's normal retirement eligibility shall be based on the attainment of at least age sixty-seven and the completion of at least ten years of credited service.

4.

A temporary annuity paid pursuant to subsection 4 of section 104.1024 shall be payable if the member has attained at least age fifty-five with the sum of the HCS SB 1572 8 member's age and credited service equaling at least ninety;

or in the case of a member who is serving as a uniformed member of the highway patrol and subject to the mandatory retirement provisions of section 104.081, the temporary annuity shall be payable if the member has attained at least age sixty, or at least age fifty-five with ten years of credited service.

5.

A member, other than a member who is serving as a uniformed member of the highway patrol and subject to the mandatory retirement provisions of section 104.081, shall be eligible for an early retirement annuity upon the attainment of at least age sixty-two and the completion of at least ten years of credited service.

A vested former member who terminated employment prior to the attainment of early retirement eligibility shall not be eligible for early retirement.

6.

The provisions of subsection 6 of section 104.1021 and section 104.344 as applied pursuant to subsection 7 of section 104.1021 and section 104.1090 shall not apply to members covered by this section.

7.

The minimum credited service requirements of five years contained in sections 104.1018, 104.1030, 104.1036, and 104.1051 shall be ten years for members covered by this section.

The normal and early retirement eligibility requirements in this section shall apply for purposes of administering section 104.1087.

8.

A member shall be required to contribute four percent of the member's pay to the retirement system, which shall stand to the member's credit in his or her individual account with the system, together with investment credits thereon, for purposes of funding retirement benefits payable HCS SB 1572 9 under the year 2000 plan, subject to the following provisions:

(1) The state of Missouri employer, pursuant to the provisions of 26 U.S.C.

Section 414(h)(2), shall pick up and pay the contributions that would otherwise be payable by the member under this section.

The contributions so picked up shall be treated as employer contributions for purposes of determining the member's pay that is includable in the member's gross income for federal income tax purposes;

(2) Member contributions picked up by the employer shall be paid from the same source of funds used for the payment of pay to a member.

A deduction shall be made from each member's pay equal to the amount of the member's contributions picked up by the employer.

This deduction, however, shall not reduce the member's pay for purposes of computing benefits under the retirement system pursuant to this chapter;

(3) Member contributions so picked up shall be credited to a separate account within the member's individual account so that the amounts contributed pursuant to this section may be distinguished from the amounts contributed on an after-tax basis;

(4) The contributions, although designated as employee contributions, shall be paid by the employer in lieu of the contributions by the member.

The member shall not have the option of choosing to receive the contributed amounts directly instead of having them paid by the employer to the retirement system;

(5) Interest shall be credited annually on June thirtieth based on the value in the account as of July first of the immediately preceding year at a rate of four percent.

Effective June 30, 2014, and each June thirtieth HCS SB 1572 10 thereafter, the interest crediting rate shall be equal to the investment rate that is published by the United States Department of the Treasury, or its successor agency, for fifty-two week treasury bills for the relevant auction that is nearest to the preceding July first, or a successor treasury bill investment rate as approved by the board if the fifty-two week treasury bill is no longer issued.

Interest credits shall cease upon termination of employment if the member is not a vested former member.

Otherwise, interest credits shall cease upon retirement or death;

(6) (a) A vested former member or a former member who is not vested may request a refund of his or her contributions and interest credited thereon.

If such member is married at the time of such request, such request shall not be processed without consent from the spouse.

Such member is not eligible to request a refund if such member's retirement benefit is subject to a division of benefit order pursuant to section 104.1051.

[Such refund] (b) For a former member who is not vested, the system shall refund the former member's contributions and interest credited thereon if the total amount thereof is one thousand dollars or less, or such other amount as may be permitted under applicable federal law.

a.

The system and the treasurer are authorized to share information consistent with section 447.560 for purposes of the system's refunding such former member's contributions and credited interest directly to the former member or the former member's survivor or beneficiary.

b.

The availability of the shared information for the public inspection shall be consistent with section 447.560.

c.

The system's procedures in effect from time to time to locate such former member, survivor, or beneficiary shall HCS SB 1572 11 be considered reasonable and necessary diligence consistent with good business practice and in compliance with federal law.

(c) Contribution refunds shall be paid by the system within an administratively reasonable period, but no sooner than ninety days from the date of termination of employment.

The amount refunded shall include all employee contributions made to any retirement plan administered by the system and interest credited thereon.

(d) A vested former member may not request a refund after such member becomes eligible for normal retirement.

(e) A vested former member or a former member who is not vested who receives a refund shall forfeit all the member's credited service and future rights to receive benefits from the system and shall not be eligible to receive any disability benefits;

provided that any member or vested former member receiving disability benefits shall not be eligible for a refund.

If such member subsequently becomes an employee and works continuously for at least one year, the credited service previously forfeited shall be restored if the member returns to the system the amount previously refunded plus interest at a rate established by the board;

(7) The beneficiary of any member who made contributions shall receive a refund upon the member's death equal to the amount, if any, of such contributions and interest credited thereon less any retirement benefits received by the member unless an annuity is payable to a survivor or beneficiary as a result of the member's death.

In that event, the beneficiary of the survivor or beneficiary who received the annuity shall receive a refund upon the survivor's or beneficiary's death equal to the HCS SB 1572 12 amount, if any, of the member's contributions less any annuity amounts received by the member and the survivor or beneficiary.

9.

The employee contribution rate, the benefits provided under the year 2000 plan to members covered under this section, and any other provision of the year 2000 plan with regard to members covered under this section may be altered, amended, increased, decreased, or repealed, but only with respect to services rendered by the member after the effective date of such alteration, amendment, increase, decrease, or repeal, or, with respect to interest credits, for periods of time after the effective date of such alteration, amendment, increase, decrease, or repeal.

10.

For purposes of members covered by this section, the options under section 104.1027 shall be as follows:

Option 1.

A retiree's life annuity shall be reduced to a certain percent of the annuity otherwise payable.

Such percent shall be eighty-eight and one half percent adjusted as follows:

if the retiree's age on the annuity starting date is younger than sixty-seven years, an increase of three-tenths of one percent for each year the retiree's age is younger than age sixty-seven years;

and if the beneficiary's age is younger than the retiree's age on the annuity starting date, a decrease of three-tenths of one percent for each year of age difference;

and if the retiree's age is younger than the beneficiary's age on the annuity starting date, an increase of three-tenths of one percent for each year of age difference;

provided, after all adjustments the HCS SB 1572 13 option 1 percent cannot exceed ninety-four and one quarter percent.

Upon the retiree's death, fifty percent of the retiree's reduced annuity shall be paid to such beneficiary who was the retiree's spouse on the annuity starting date or as otherwise provided by subsection 5 of this section.

Option 2.

A retiree's life annuity shall be reduced to a certain percent of the annuity otherwise payable.

Such percent shall be eighty-one percent adjusted as follows:

if the retiree's age on the annuity starting date is younger than sixty-seven years, an increase of four-tenths of one percent for each year the retiree's age is younger than sixty-seven years;

and if the beneficiary's age is younger than the retiree's age on the annuity starting date, a decrease of five-tenths of one percent for each year of age difference;

and if the retiree's age is younger than the beneficiary's age on the annuity starting date, an increase of five-tenths of one percent for each year of age difference;

provided, after all adjustments the option 2 percent cannot exceed eighty-seven and three quarter percent.

Upon the retiree's death one hundred percent of the retiree's reduced annuity shall be paid to such beneficiary who was the retiree's spouse on the annuity starting date or as otherwise provided by subsection 5 of this section.

Option 3.

HCS SB 1572 14 A retiree's life annuity shall be reduced to ninety-three percent of the annuity otherwise payable.

If the retiree dies before having received one hundred twenty monthly payments, the reduced annuity shall be continued for the remainder of the one hundred twenty-month period to the retiree's designated beneficiary provided that if there is no beneficiary surviving the retiree, the present value of the remaining annuity payments shall be paid as provided under subsection 3 of section 104.620.

If the beneficiary survives the retiree but dies before receiving the remainder of such one hundred twenty monthly payments, the present value of the remaining annuity payments shall be paid as provided under subsection 3 of section 104.620.

Option 4.

A retiree's life annuity shall be reduced to eighty-six percent of the annuity otherwise payable.

If the retiree dies before having received one hundred eighty monthly payments, the reduced annuity shall be continued for the remainder of the one hundred eighty-month period to the retiree's designated beneficiary provided that if there is no beneficiary surviving the retiree, the present value of the remaining annuity payments shall be paid as provided under subsection 3 of section 104.620.

If the beneficiary survives the retiree but dies before receiving the remainder of such one hundred eighty monthly payments, the present value of HCS SB 1572 15 the remaining annuity payments shall be paid as provided under subsection 3 of section 104.620.

11.

The provisions of subsection 6 of section 104.1024 shall not apply to members covered by this section.

12.

Effective January 1, 2018, a member who is not a statewide elected official or a member of the general assembly shall be eligible for retirement under this subsection subject to the following conditions:

(1) A member's normal retirement eligibility shall be based on the attainment of at least age sixty-seven and the completion of at least five years of credited service;

or the member's attainment of at least age fifty-five with the sum of the member's age and credited service equaling at least ninety;

or in the case of a member who is serving as a uniformed member of the highway patrol and subject to the mandatory retirement provisions of section 104.081, such member's attainment of at least age sixty or the attainment of at least age fifty-five with five years of credited service;

(2) A vested former member's normal retirement eligibility shall be based on the attainment of at least age sixty-seven and the completion of at least five years of credited service;

except that, a vested former member who terminates employment after the attainment of normal retirement eligibility as described in subdivision (1) of this subsection shall be covered under such subdivision;

(3) A temporary annuity paid under subsection 4 of section 104.1024 shall be payable if the member has attained at least age fifty-five with the sum of the member's age and credited service equaling at least ninety;

or in the case of a member who is serving as a uniformed member of the highway patrol and subject to the mandatory retirement provisions of HCS SB 1572 16 section 104.081, the temporary annuity shall be payable if the member has attained at least age sixty, or at least age fifty-five with five years of credited service;

(4) A member, other than a member who is serving as a uniformed member of the highway patrol and subject to the mandatory retirement provisions of section 104.081, shall be eligible for an early retirement annuity upon the attainment of at least age sixty-two and the completion of at least five years of credited service.

A vested former member who terminated employment prior to the attainment of early retirement eligibility shall not be eligible for early retirement;

(5) The normal and early retirement eligibility requirements in this subsection shall apply for purposes of administering section 104.1087;

(6) The survivor annuity payable under section 104.1030 for vested former members who terminated employment prior to the attainment of early retirement eligibility and who are covered by this section shall not be payable until the deceased member would have reached his or her normal retirement eligibility under this subsection;

(7) The annual cost-of-living adjustment payable under section 104.1045 shall not commence until the second anniversary of the annuity starting date for vested former members who terminated employment prior to the attainment of early retirement eligibility and who are covered by this subsection;

(8) The unused sick leave credit granted under subsection 2 of section 104.1021 shall not apply to members covered by this subsection unless the member terminates employment after reaching normal retirement eligibility or HCS SB 1572 17 becoming eligible for an early retirement annuity under this subsection;

and (9) The minimum credited service requirements of five years contained in sections 104.1018, 104.1030, 104.1036, and 104.1051 shall be five years for members covered by this subsection.

104.1092.

1.

In lieu of retirement annuity benefits otherwise payable under the closed plan or year 2000 plan, any member who has terminated employment, is entitled to a deferred annuity, and has not yet reached normal retirement age or eligibility may make a one-time election to receive a lump sum payment equal to a percentage of the present value of such member's deferred annuity should a board choose to establish such a program by board rule pursuant to section 104.1063.

2.

Any such election under subsection 1 of this section may be made by the member beginning on [a date as established by the board under such program but not] or after [May 31, 2018.

After May 31, 2018, no such election shall be made and retirement annuity benefits shall only be paid as otherwise provided by law under this chapter] January 1, 2027.

3.

Any such member making such election under subsection 1 of this section shall forfeit all such member's creditable or credited service and future rights to receive retirement annuity benefits from the system under this chapter and shall not be eligible to receive any long-term disability benefits.

If such member subsequently becomes an employee, such member shall be considered a new employee with no prior credited service and shall be subject to the provisions of section 104.1091.

HCS SB 1572 18 105.695.

1.

No contribution or expenditure of system funds shall be made directly by any public pension system to advocate, support, or oppose the passage or defeat of any ballot measure or the nomination or election of any candidate for public office.

Nor shall any system funds pay any debts or obligations of any committee supporting or opposing such ballot measures or candidates.

2.

Nothing in this section shall prohibit retirement systems and their employees from educating and informing members and the public about potential impacts to the system through regular system programs, processes, and job duties.

3.

For the purposes of this section, the term "system" shall be defined as any retirement system established by the state of Missouri or any political subdivision or instrumentality of the state for the purpose of providing plan benefits for elected or appointed public officials or employees of the state of Missouri or any political subdivision or instrumentality of the state.

169.450.

1.

The general administration and responsibility for the proper operation of the retirement system and for making effective the provisions of sections 169.410 to 169.540 are hereby vested in a board of trustees of thirteen persons, as follows:

(1) Four trustees to be appointed for terms of four years by the board of education;

provided, however, that their terms shall be fixed so the terms of one of the trustees so appointed shall expire each year.

The members of such board of trustees appointed by the board of education may be members of the board of education or other individuals deemed qualified to hold such positions by the board of education;

HCS SB 1572 19 (2) Four trustees to be elected for terms of four years by and from the active members of the retirement system who shall hold office as trustees only while active members;

provided, however, that their terms shall be fixed so that the terms of one of the trustees so elected shall expire each year;

and provided further, that not more than two of such persons shall be teachers and two shall be nonteachers.

For the purposes of this subsection, a school administrator shall not be eligible for the positions established pursuant to this subdivision and shall be eligible for the position established pursuant to subdivision (4) of this subsection;

(3) Two trustees, who shall be retired members, to be elected for terms of four years by and from the retired members of the retirement system;

provided, however, that the terms of office of the first two trustees so elected shall begin immediately upon their election and shall expire two and four years from the date of their election, respectively;

and provided further, that not more than one of such persons shall be a teacher and one shall be a nonteacher;

(4) One member, who shall be a school administrator, to be elected for a term of four years by and from the active members of the retirement system who shall hold office as a trustee only while an active member;

except that, the initial term of office of such trustee shall expire on December 31, 1999;

(5) Two trustees to be appointed for terms of four years by the Missouri Charter Public School Association;

provided, however, that the terms of office of the first two trustees so elected shall begin immediately upon their election and shall expire two and four years from the date HCS SB 1572 20 of their election, respectively.

The members of such board of trustees appointed by the Missouri Charter Public School Association shall have experience or qualifications relevant to public charter schools and the retirement system, and at least one such member shall be a teacher.

The appointment of the trustees shall be subject to the same rules and regulations applicable to other trustees, including, but not limited to, taking an oath of office as provided in subsection 5 of this section.

2.

If a vacancy occurs in the office of trustee, the vacancy shall be filled for the unexpired term in the same manner as the office was previously filled.

No vacancy or vacancies on the board of trustees shall impair the power of the remaining trustees to administer the retirement system pending the filling of such vacancies.

3.

In the event of a lapse of a school district's corporate organization as described in subsections 1 and 4 of section 162.081, or for any other reason, the general administration and the responsibility for the proper operation of the retirement system shall continue to be fully vested in the trustees then currently serving and such trustees shall continue to serve and be elected in the same manner as set forth in this statute as if no lapse had occurred, except that in the event of vacancies occurring in the office of trustees appointed by the board of education prior to the lapse, the board of trustees shall appoint a qualified person or persons to fill such vacancy or vacancies for terms of up to four years.

4.

Trustees shall serve without compensation, and any trustee shall be reimbursed from the expense fund for all necessary expenses which the trustee may incur through service on the board of trustees.

HCS SB 1572 21 5.

Each trustee shall, within ten days after such trustee's appointment or election, take an oath of office before the clerk of the circuit court of the judicial circuit in which the school district is located that, so far as it devolves upon the trustee, the trustee will diligently and honestly administer the affairs of the board of trustees and that the trustee will not knowingly violate or willingly permit to be violated any of the provisions of the law applicable to the retirement system.

Such oath shall be subscribed to by the trustee making it and filed in the office of the clerk of the circuit court.

6.

The circuit court of the judicial circuit in which the school district is located shall have jurisdiction over the members of the board of trustees to require them to account for their official conduct in the management and disposition of the funds and property committed to their charge;

to order, decree and compel payment by them to the public school retirement system of their school district of all sums of money, and of the value of all property which may have been improperly retained by them, or transferred to others, or which may have been lost or wasted by any violation of their duties or abuse of their powers as such members of such board;

to remove any such member upon proof that the trustee has abused the trustee's trust or has violated the duties of the trustee's office;

to restrain and prevent any alienation or disposition of property of such public school retirement system by the members, in cases where it may be threatened, or there is good reason to apprehend that it is intended to be made in fraud of the rights and interests of such public school retirement system.

The jurisdiction conferred by sections 169.410 to 169.540 shall be exercised as in ordinary cases upon HCS SB 1572 22 petition, filed by the board of education of such school district, or by any two members of the board of trustees.

Such petition shall be heard in a summary manner after ten days' notice in writing to the member complained of, and an appeal shall lie from the judgment of the circuit court as in other causes and be speedily determined, but such appeal shall not operate under any condition as a supersedeas of a judgment of removal from office.

7.

Each trustee shall be entitled to one vote in the board of trustees.

[Six votes shall be necessary for a decision by the trustees at any meeting of the board of trustees.] Seven members of the board of trustees shall constitute a quorum for the transaction of business at any meeting of the board of trustees.

Notwithstanding the foregoing, no action or decision of the board of trustees shall be effective unless approved by the affirmative vote of at least seven members of the board of trustees.

8.

Subject to the limitations of sections 169.410 to 169.540, the board of trustees shall, from time to time, establish rules and regulations for the administration of the retirement system, for eligibility for and determination of benefits under the retirement system, for the investment of retirement system assets, and for the transaction of the retirement system's business.

9.

The board of trustees shall elect from its membership a chairman and shall, by majority vote of its members, appoint a secretary, who may be, but need not be, one of its members.

It shall engage such actuarial and other services as shall be required to transact the business of the retirement system.

It shall also engage an investment counselor who shall be experienced in the investment of moneys to advise the trustees on investments HCS SB 1572 23 of the retirement system.

The compensation of all persons engaged by the board of trustees and all other expenses of the board necessary for the operation of the retirement system shall be paid at such rates and in such amounts as the board of trustees shall approve.

10.

The board of trustees shall keep in convenient form such data as shall be necessary for actuarial valuations of the assets of the retirement system and for checking the experience of the system.

11.

The board of trustees shall keep a record of all its proceedings which shall be open to public inspection.

It shall prepare annually and send to the board of education and to each member of the retirement system a report showing the fiscal transactions of the retirement system for the preceding fiscal year, a detailed listing of all salaries and expenditures incurred by the trustees for its operation, the amount of the accumulated cash and securities of the system, and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system.

The board of trustees shall also prepare or cause to be prepared an annual report concerning the operation of the retirement system herein provided for, which report shall be sent by the chairman of the board of trustees to the board of education.

12.

The board of trustees shall arrange for necessary legal advice for the operation of the retirement system.

13.

The board of trustees shall designate a medical board to be composed of three physicians, none of whom shall be eligible for benefits pursuant to sections 169.410 to 169.540, who shall arrange for and pass upon all medical examinations required pursuant to the provisions of sections HCS SB 1572 24 169.410 to 169.540, shall investigate all essential statements and certificates made by or on behalf of a member in connection with an application for disability retirement and shall report in writing to the board of trustees its conclusions and recommendations upon all matters referred to it.

14.

The actuary shall be the technical adviser of the board of trustees on matters regarding the operation of the system created by sections 169.410 to 169.540 and shall perform such other duties as are required in connection therewith.

Such person shall be qualified as an actuary by membership as a fellow in the Society of Actuaries or by objective standards which are no less stringent than those established by the Society of Actuaries.

15.

At least once in each five-year period the actuary shall make an investigation into the actuarial experience of the retirement system, and taking into account the results of such investigation of the experience, the board of trustees shall adopt for the retirement system such actuarial assumptions as shall be deemed necessary.

16.

On the basis of such actuarial assumptions as the board of trustees shall adopt, the actuary shall make an annual valuation of the assets and liabilities of the funds of the retirement system.

17.

On the basis of the valuation the board of trustees shall certify the rates of contribution payable by the board of education.