COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:0715H.03P Bill No.:Perfected HCS for HB 155 Subject:Retirement Systems and Benefits - General; Employees - Employers; Treasurer,
State; Boards, Commissions, Committees, and Councils
Type:Original Date:April 13, 2023Bill Summary:This proposal establishes provisions relating to retirement systems.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026
General Revenue
$0 to (Unknown,
Could exceed
$2,000,000)
$0 to (Unknown,
Could exceed
$2,000,000)
$0 to (Unknown,
Could exceed
$2,000,000)
Total Estimated Net
Effect on General
Revenue
$0 to (Unknown,
Could exceed
$2,000,000)
$0 to (Unknown,
Could exceed
$2,000,000)
$0 to (Unknown,
Could exceed
$2,000,000)
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Show-Me
MyRetirement
Savings
Administrative Fund$0 or Unknown$0 or Unknown$0 or Unknown
Total Estimated Net
Effect on Other State
Funds$0 or Unknown$0 or Unknown$0 or Unknown
Numbers within parentheses: () indicate costs or losses. L.R. No. 0715H.03P
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Show-Me
MyRetirement
Savings
Administrative Fund –
State Treasurer’s
Office
0 or 2 FTE0 or 2 FTE0 or 2 FTE
Total Estimated Net
Effect on FTE0 or 2 FTE0 or 2 FTE0 or 2 FTE
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026
Local Government$0
$0 or
Could exceed
$10,400,000 to
(Unknown)
$0 or
Could exceed
$10,400,000 to
(Unknown) L.R. No. 0715H.03P
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FISCAL ANALYSIS
ASSUMPTION
Oversight was unable to receive some of the agency responses in a timely manner due to the
short fiscal note request time. Oversight has presented this fiscal note on the best current
information that we have or on prior year information regarding a similar bill. Upon the receipt
of agency responses, Oversight will review to determine if an updated fiscal note should be
prepared and seek the necessary approval to publish a new fiscal note.
Sections 285.1000 to 285.1055 – Show-Me MyRetirement Savings
Officials from the Office of the State Treasurer did not respond to Oversight’s request for
fiscal impact for this proposal.
In response to a similar proposal, SCS HCS HB 1732 (2022), officials from the State
Treasurer's Office (STO) stated their office does not currently deal with retirement savings nor
have the capacity to take on the duties necessary to begin a program like the Show-Me
MyRetirement Savings Board. The STO does not operate any similar programs and does not
currently have the resources to absorb the duties assigned to support the startup of the Show-Me
MyRetirement Savings Board. As such, the STO has estimated a minimum of two (2) FTEs
being required to support the Board and the Program. STO has assigned these costs to the
General Revenue Fund as these duties are beyond the scope of permitted expenditures from the
State Treasurer’s General Operations Fund pursuant to Section 30.605, RSMo, which authorizes
the Treasurer to retain interest to fund the office functions pertaining to the management of state
funds. The basis point cap included within this section cannot absorb additional functions
without being raised above 15 basis points.
Oversight assumes the STO’s administrative costs will be incurred in the new fund.
In response to the previous version, officials from Office of Administration - Budget and
Planning (B&P) assumed this proposal would establish the Show-Me MyRetirement Savings
Administrative Fund. Revenues deposited into the newly-created fund in the form of gifts,
donations, grants or fees could increase Total State Revenue. Any new application, account,
administrative, or other fees deposited into the fund could impact the calculation pursuant to Art.
X, Sec. 18(e). Additionally, to the extent that individuals elect to make pre-tax contributions into
a qualified retirement plan under this section, TSR could be impacted.
Officials from Department of Revenue (DOR) assume this proposal allows businesses to create
a program similar to the state employee’s deferred compensation system. It should be noted that
businesses already have the ability to do so under current law. This would just create a system
by which multiple businesses could band together to form this deferred compensation plan.
Section 285.1015.2(7) allows that pretax contributions can be contributed and those pretax L.R. No. 0715H.03P
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contributions could potentially have an impact on general revenue and TSR, DOR officials,
given that current law allows these programs, are not sure this would result in any additional
impact to the state.
The proposal has the potential to negatively impact DOR, but the extent of the impact is unclear.
One section of the proposal (Section 285.1025) insulates employers against any adverse Missouri
tax consequences as a result of participating in the Show-Me MyRetirement Plan, which would
likely affect tax administration with respect to these employers in some situations. Section
285.1010.2 requires a state agency to cooperate with others and Section 285.1010 may give the
board that oversees these plans the ability to alter Missouri withholding tax forms. Section
285.1015 authorizes the board to use state agency’s infrastructure. If any of these requirements
lead to affecting Missouri employer tax filings or authorize the use of DOR’s infrastructure,
these actions could have a negative fiscal impact on the Department. The impact is unknown but
has the potential to be substantial.
Oversight assumes the DOR is provided with core funding to handle a certain amount of activity
each year. Oversight assumes DOR could absorb the costs related to this proposal. If multiple
bills pass or if employer plans use of DOR infrastructure which require additional staffing and
duties at substantial costs, DOR could request funding through the appropriation process.
In response to the previous version, officials from the Office of the Governor stated this
proposal adds to the governor’s current load of appointment duties. Individually, additional
requirements should not fiscally impact the Office of the Governor. However, the cumulative
impact of additional appointment duties across all enacted legislation may require additional
resources for the Office of the Governor.
In response to the previous version, officials from the Office of Administration assumed the
proposal will have no fiscal impact on their organization.
Officials from the Missouri Senate and the Missouri House of Representatives each assume
the proposal will have no fiscal impact on their respective organizations. Oversight does not
have any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal
note for these agencies.
Oversight assumes this proposal creates the Show-Me MyRetirement Plan and creates the
Show-Me MyRetirement Plan Board comprised of nine members.
Oversight assumes this proposal allows employees enrolled in the program to contribute a
minimum of 1% of their wages to the plan. (And, at the discretion of the Board, increase the
minimum contribution rate for participants 1% per year for each additional year the participant is
employed up to the maximum percentage that may be contributed under federal law.) The plan
allows voluntary pre-tax or designated Roth 401(k) contributions and is only available to
employers that currently do not offer specified tax-favored plan for their employees and employ L.R. No. 0715H.03P
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less than fifty employees. Therefore, Oversight assumes this proposal could result in a revenue
loss from pre-tax contributions that otherwise would have been taxed.
Oversight notes, in 2016, Oregon created a state-based retirement savings program called
OregonSaves. The program allows employees and workers to enroll in an automatic payroll
deduction to Roth IRAs for self-employed workers and employees that are not offered retirement
savings options through their employer. Based on the OregonSaves 2018 Annual Report to the
Legislature, the combined retirement savings of the program was approximately $10.9 million.
Oversight notes, based on a Supplemental Appropriation Request, the Oregon State Treasury
was appropriated $1,021,497 (approximately $500,000 annually) for staffing and other costs
during the 2015-2017 biennium with an additional appropriation for $252,372 for legal expenses.
For the 2017-2019 biennium, the Oregon State Treasury was appropriated $2,187,774 with a
supplemental request for an additional $1,834,033 for a total of $4,021,807 in General Funds
(approximately $2,000,000 annually). Oversight notes the OregonSaves program was created
with different groups being phased in over time. Based on the Annual Report, the program has a
participation rate of 72.75%.
Oversight assumes the administrative impact of the proposal could be similar to the cost
experienced by the OregonSaves program, approximately $2,000,000 per year. Oversight will
show a cost that could exceed approximately $2,000,000 per year. Additionally, Oversight notes
this program is subject to appropriation; therefore, Oversight will show the cost as $0 (no
appropriation) to the cost estimated above as appropriated by the General Assembly.
Oversight assumes start-up costs would diminish over time as the fund becomes self-sustaining.
The start-ups costs provided by the State would be repaid by the board with moneys on deposit
which may have a positive impact on General Revenue in the future; however, Oversight is
unsure when this would occur.
Oversight assumes this proposal creates the Show-Me MyRetirement Savings Administrative
Fund which consists of moneys appropriated by the General Assembly, transferred from the
federal government, state agencies or local governments, from the payment of fees, gifts,
donations, or grants for administrative purposes for the Show-Me MyRetirement Savings Plan.
Oversight assumes that costs and revenues would net to zero or revenues would exceed costs as
the fund becomes self-sustaining.
House Amendment 2
Section 104.436 - Level Percent-of-Payroll Amortization Method
In response to a similar proposal, SB 77 (2023), officials from the Missouri State Employee's
Retirement System (MOSERS) stated the proposed legislation would remove the requirement
that annual contributions for payment of the unfunded actuarial accrued liabilities (UAAL) be
determined using the level percent-of-payroll amortization method for the Missouri State L.R. No. 0715H.03P
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Employees’ Retirement System (MOSERS), and the Missouri Department of Transportation and
Patrol Employees’ Retirement System (MPERS).
The removal of this requirement does not obligate the MOSERS or MPERS Board of Trustees to
calculate the annual contribution payment on the UAAL in an alternate manner than as past
practice. This would simply allow the Board to consider other actuarial funding methods relative
to paying down the UAAL.
The statutory provisions outlining level percent of payroll amortization were initially passed in
1981 (Section 104.436) and 1999 (Section 104.1066). A level percent of payroll amortization
incorporates a payroll growth assumption—essentially the payments are computed with the
expectation that payments will increase as payroll grows in the future. In June 30, 2009,
MOSERS covered payroll was approximately $2 billion. Since that time, covered payroll has
remained below the 2009 level with little to no growth.
In response to a similar proposal, SB 77 (2023), officials from MoDOT & Patrol Employees’
Retirement System (MPERS) stated, if enacted, this proposal would modify the language
related to the cost methods applicable to the actuarial amortization for the unfunded liabilities for
MPERS and MOSERS. The change would allow either plan the flexibility to choose the
appropriate cost method. MPERS assumes the proposal will have no fiscal impact on their
organization.
Oversight assumes this proposal removes the prescribed method for determining contributions
for payment of unfunded accrued liabilities and would allow for an alternative method which
could result in higher or lower employer contributions than the level percent of payroll
amortization method. If the retirement systems use an alternative method to pay down the UAAL
to greater effect, Oversight assumes this could be a cost to the state from increased employer
contributions. However, Oversight notes this proposal is permissive and a change in the method
used would not occur without action from the Board of Trustees; therefore, Oversight will reflect
a zero impact on the fiscal note.
Section 168.082 – Speech Implementer
Oversight does not anticipate an impact from this provision.
House Amendment 3
Section 104.160 – MPERS Board of Trustees
Officials from MoDOT & Patrol Employees’ Retirement System (MPERS) state Section
104.160 of the proposed bill, if enacted, would stagger the terms for MPERS’ elected trustees.
MPERS has four trustees elected by representative bodies (two active employees, one each from
MoDOT and the Highway Patrol and two retirees, one each from MoDOT and the Highway
Patrol) for four-year terms. At present, all four of these positions become eligible for reelection L.R. No. 0715H.03P
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at the same time. In the event all four trustees had opposition and then were all replaced with
new trustees, MPERS’ board would have a significant turnover of trustees (4 out of 11 total
trustees) and loss of institutional knowledge because some of the elected trustees have been on
the board for several years.
If enacted, MPERS would hold the scheduled election in March of 2026. The active trustees
elected at that time would serve a two-year term rather than four years. MPERS would hold a
new election for the active trustees in March of 2028 and those newly elected active trustees
would then serve a four-year term going forward, thereby staggering the terms.
The outcome will require MPERS to hold elections more often (every two years rather than
every four years), but it is not a significant enough change to overshadow the benefit of not
losing four elected trustees simultaneously. The MPERS Board of Trustees is going through
several process improvements intended to improve the organization and its oversight. This
proposal is supported by the board as one of those improvements.
Public Schools and Education Employee Retirement Systems
Officials from the Public Schools and Education Employee Retirement Systems
(PSRS/PEERS) state this legislation, as currently drafted, has multiple components impacting
Public School Retirement System of Missouri (PSRS) and the Public Education Employee
Retirement System (PEERS) that are each addressed below. PSRS and PEERS are separate trust
funds and must be evaluated individually. This memo discusses the impacts on both plans but
separate cost statements are provided by the Systems’ actuaries.
The Systems have an actuary firm, PricewaterhouseCoopers (PwC), that prepares actuarial cost
statements on any proposed legislation as well as the annual actuarial valuation reports for the
Systems. PwC has reviewed each component of the proposed legislation for impacts to the
System individually, as well as evaluated the fiscal impact of all components in aggregate. The
impact of individual components and the aggregate fiscal impact of the legislation are discussed
in more detail below. The fiscal impact of all provisions in aggregate are expected to be a fiscal
savings to both PSRS and PEERS, if retirement behavior is similar to the assumptions utilized in
the analysis. Please note individual components vary and are further discussed below.
Section 169.560 - Working After Retirement - PSRS Retiree in Non-Certificated Position
Currently, any retired teacher from PSRS can be employed in a non-certificated position covered
under PEERS without impacting their retirement benefit up to certain limitations. Any
certificated retiree may earn up to 60% of the minimum teacher's salary ($15,000) as established
by Section 163.172, RSMo, and will not contribute to the retirement system or earn creditable
service for that work. The employers would be required to contribute into the PEERS for such
employment. L.R. No. 0715H.03P
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This legislation will allow a retired, certificated teacher, working in a non-certificated position
covered under PEERS, to earn up to 133% the annual earnings limit applicable to a Social
Security limitation as set forth in 20 CFR 404.430 through June 30, 2028. After June 30, 2028
the retired, certificated teacher, working in a non-certificated position covered under PEERS,
would be able to earn up to the annual earnings limit applicable to a Social Security limitation as
set forth in 20 CFR 404.430.
PwC reviewed this portion of the legislation and estimate the impact of the proposed change to
increase the pay-based limit on working after retirement under RSMo 169.560 Paragraph 2, in
particular the increase to 133% of the annual Social Security earnings exemption amount through
June 30, 2028 and then to 100% of the annual Social Security earnings exemption amount
thereafter, to be a fiscal loss to PSRS if there is a change in active member retirement behavior to
retire earlier as a result. This analysis is based on this provision in isolation and not the aggregate
impact of all components of the legislation.
PwC indicated the proposed change to Section 169.560 Paragraph 2 is expected to result in an
insignificant fiscal gain to PEERS.
Section 169.596 - Critical Shortage
4 Years instead of 2 Years
The critical shortage employment exception found in Section 169.596, RSMo, is a statutory
provision which allows covered employers who meet certain requirements (as set forth in statute)
to employ a limited number of PSRS/PEERS retirees up to full-time without affecting the
payment of their retirement benefits. Each retired member is limited to two years working under
the critical shortage employment exception.
During the two years of critical shortage employment, employer contributions must be made on
all salary earned, including employer-paid medical insurance premiums and pay for additional
duties. The retired members employed under this provision continue to receive benefits, but do
not contribute to PSRS/PEERS or earn service. By statute, districts cannot use the critical
shortage employment exception to fill the position of superintendent.
This legislation allows retirees to return to work under the critical shortage exemption statute up
to four years versus the current two-year restriction. PwC reviewed this portion of the proposed
legislation and it is expected to have an insignificant fiscal gain for both PSRS and PEERS.
Number of Positions Allowed
The critical shortage employment exception found in Section 169.596, RSMo, indicates the total
number of retired certificated teachers hired under the critical shortage declaration shall not
exceed the littlest of ten percent of the total teacher staff for that school district, or five
certificated teachers. The proposed legislative would change this provision to be the greater of L.R. No. 0715H.03P
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one percent of the total certificated teachers and noncertificated staff for that school district or
five certificated teachers.
PwC reviewed this portion of the proposed legislation and noted it is expected to have an
insignificant fiscal gain for PSRS and PEERS.
Section 169.070 - 2.55% Formula Factor Provision
This legislation removes the expiration date of July 1, 2014, for the 2.55% Formula Factor
Provision with 31 or more years of service for 169.070.1(8), RSMo for members of the Public
School Retirement System of Missouri (PSRS). Additionally, this legislation amends the years of
service requirement for the provision from 31 or more years of service to 32 or more years of
service.
Currently, PSRS members who have 32 years or more of creditable service and retire have their
retirement benefit calculated using a multiplier of 2.5%. The 2.55% Benefit Formula Factor
Provision would allow for eligible members with 32 or more years of service to retire with an
additional 0.05% Formula Factor.
The analysis prepared by PwC indicating, the proposed legislation would reduce the Plan’s
Actuarial Accrued Liability (AAL) by $234.4 million and result in an increase to the Plan’s pre-
funded ratio of 0.37%.
There are two components that impact the Actuarially Determined Contribution Rate (ADC) for
a public retirement plan; the Normal Cost Rate (NC) and the Unfunded Actuarial Accrued
Liability Rate (UAAL). The reduction of the AAL, results in a decrease in the annual UAAL rate
resulting in annual savings of approximately $14 million for the next 30 years (for PSRS). There
are additional annual savings of $7.2 million per year due to the reduction of the normal cost as a
result of these provisions being made a permanent part of the benefit structure. The annual
normal costs savings will continue as long as the new provisions are in force (this could extend
beyond 30 years).
The annual savings of $21.2 million per year for the next 30 years is due to the reduction of the
UAAL Rate and the NC Rate of the Plan as a result of the 2.55% provision being made a
permanent part of the benefit structure (for PSRS).
PwC modeled two scenarios based on current information that result in a fiscal gain for PSRS.
PwC’s further notes that it is also possible for PSRS to experience no fiscal gain or a fiscal cost
related to these changes, depending on whether or not active members and employers change
their behavior as expected. This portion of the legislation has no impact on PEERS.
Oversight assumes the reduction in the Normal Cost Rate and the Unfunded Actuarial Accrued
Liability will result in a decrease to the Actuarially Determined Contribution (ADC) Rate. Below L.R. No. 0715H.03P
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are the Employer Contribution estimates provided by PricewaterhouseCoopers’ actuarial cost
statement.
Employer ContributionsFY 2024FY 2025FY 2026Baseline$773 million$776 million$768 millionProposed$762 million$765 million$757 millionSavings$11 million$11 million$11 million
Oversight assumes this proposal is effective August 28, 2023 (FY 2024). Oversight notes the
estimated annual savings of $21.2 million is split between employer contributions and employee
contributions.
Aggregate Fiscal Impact to all Proposed Provisions for PSRS/PEERS
There are only two provisions that are expected to have a significant impact on the Systems.
Those provisions are the changes to the annual earnings limit for PSRS retirees working in non-
certificated positions and the reinstatement of the 2.55% formula factor for PSRS members that
work at least 32 years. As discussed, the 2.55% formula factor provisions are a significant fiscal
savings to PSRS. If, the change in the annual earnings limit for PSRS retirees working in non-
certificated positions through June 30, 2028, incentivizes PSRS members to retiree earlier than
expected the savings from the 2.55% provision would be diminished. However, since the
increased annual earnings limit is for a very limited time the savings are not substantially
diminished, resulting in a cost savings in total.
The analysis prepared by PwC indicated, that the proposed legislation could reduce the Plan’s
Actuarial Accrued Liability (AAL) by $213.7 million and result in an increase to the Plan’s pre-
funded ratio of 0.33%, under this scenario. It is further estimated that the actuarially determined
contribution would decrease resulting in annual savings of $20.8 million per year for the next 30
years
The aggregate impacts to PEERS are not anticipated to be fiscally significant.
Oversight assumes the reduction in the Normal Cost Rate and the Unfunded Actuarial Accrued
Liability will result in a decrease to the Actuarially Determined Contribution (ADC) Rate.
Oversight notes the estimated annual savings of $20.8 million is split between employer
contributions and employee contributions. The estimated employer contributions would
decrease by $10.4 million per year. Oversight will reflect a potential savings to school districts
for the employer contribution savings.
Oversight will show a range of impact of $0 (little or no change in the behavior of active
members and employers) to a savings in employer contributions as provided by the actuarial cost
estimate. Oversight assumes this proposal is effective August 28, 2023 (FY 2024). Given that L.R. No. 0715H.03P
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actuarial-determined contribution rates will have already been determined for FY 2024 once this
proposal is effective, Oversight will show a savings to local school districts beginning FY 2025.
House Amendment 4 – St. Louis Police Retirement System
In response to the previous version, officials from the Alternative Police Retirement System of
St. Louis (“System”)
the survivors’ benefits for surviving spouses of officer-members of the System if they remarry.
Their firm has been engaged as an actuary for the System to analyze the above amendments.
Their understanding is that each of the events that will be impacted by the proposed legislative
changes are rare in occurrence. Therefore, the actuarial assumptions used for the valuations of
the plan make no provision for these potential future events. As such, it is their determination
that the above described amendments, when valued using the same methods and assumptions as
used in the most recent periodic valuation, will not increase the System’s actuarial accrued
liability. Additionally, the historical infrequency of the events in the proposed legislative changes
are unlikely to have a material impact on the future annual funding of the System.
Oversight assumes the additional changes in the Committee Substitute are also “rare in
occurrence” and would have a minimal impact on the “System”. Therefore, Oversight will reflect
a zero impact in the fiscal note.
However, officials from the Alternative Police Retirement System of St. Louis did not respond
to Oversight’s request for fiscal impact for this proposal.
Oversight has presented this fiscal note on the best current information available. Upon the
receipt of additional responses, Oversight will review to determine if an updated fiscal note
should be prepared and seek the necessary approval to publish a new fiscal note.
House Amendment 5
Section 104.160 – Board of Trustees
Officials from MoDOT & Patrol Employees’ Retirement System (MPERS) state Section
104.160 of the proposed bill, if enacted, would stagger the terms for MPERS’ elected trustees.
MPERS has four trustees elected by representative bodies (two active employees, one each from
MoDOT and the Highway Patrol and two retirees, one each from MoDOT and the Highway
Patrol) for four-year terms. At present, all four of these positions become eligible for reelection
at the same time. In the event all four trustees had opposition and then were all replaced with
new trustees, MPERS’ board would have a significant turnover of trustees (4 out of 11 total
trustees) and loss of institutional knowledge because some of the elected trustees have been on
the board for several years.
L.R. No. 0715H.03P
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If enacted, MPERS would hold the scheduled election in March of 2026. The active trustees
elected at that time would serve a two-year term rather than four years. MPERS would hold a
new election for the active trustees in March of 2028 and those newly elected active trustees
would then serve a four-year term going forward, thereby staggering the terms.
The outcome will require MPERS to hold elections more often (every two years rather than
every four years), but it is not a significant enough change to overshadow the benefit of not
losing four elected trustees simultaneously. The MPERS Board of Trustees is going through
several process improvements intended to improve the organization and its oversight. This
proposal is supported by the board as one of those improvements.
Sections 104.380 and 104.1039 - Benefit Eligible Position as a Legislator or Elected Official
In response to a similar proposal, HCS SS SB 75 (2023), officials from the Missouri State
Employee's Retirement System (MOSERS) stated this proposal, if enacted, would allow a
retired member of MOSERS or MPERS to serve as a member of the general assembly or hold an
elected statewide office while continuing to receive a monthly retirement benefit from MOSERS
or MPERS.
Currently, if a retired member of MOSERS or MPERS returns to employment in a MOSERS or
MPERS-covered position that normally requires 1,040 or more hours annually, such retiree shall
not receive a retirement annuity for any month in which such retiree is employed.
The fiscal impact to MOSERS for this proposal is an unknown cost. The proposed change
would allow a retiree to continue to receive their retirement benefit if the retiree returns to a
benefit eligible position as a legislator or elected official. Under current law, the retirement
benefit would stop. The retiree would earn an additional benefit based on the service/salary
credit earned while reemployed, if the member works for an additional year (which is the same
as the current provision). Although MOSERS external actuarial professionals cannot directly
value the impact of this proposed change in the actuarial valuation process, they have
definitively indicated that this proposal increases the System’s liability because it will increase
benefits paid for certain MOSERS retirees, current and future, who are retired and return as
legislators or elected officials.
This proposal exempts this provision change from the current law in Section 105.684, which
requires a public pension plan in Missouri to be at least 80% funded prior to implementing a
benefit change that increases plan liabilities. Without the exemption in the proposal, MOSERS
would be prohibited from enacting such change as the plan was 58% funded as of June 30, 2022.
In response to a similar proposal, HCS SS SB 75 (2023), officials from MoDOT & Patrol
Employees’ Retirement System (MPERS) stated Section 104.380 applies to MOSERS but it
does not apply to MPERS. For clarification, MPERS Closed Plan provisions allow MPERS
retirees to be reemploy L.R. No. 0715H.03P
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Gyed by a MOSERS-covered employer, including the General Assembly, and not suspend the
benefit.
Section 104.1039 would have the effect of allowing an MPERS retiree to serve in the General
Assembly without suspension of the MPERS retirement benefit. This would have the same effect
as described in the paragraph above. Typically when an individual in the Year 2000 reemploys,
the retirement benefit is suspended, in which case MPERS is not paying out a benefit that would
otherwise be owed. That would imply a savings. If the proposed is enacted and an MPERS
retiree under this section can continue being paid a retirement benefit and can “reemploy” as a
legislator, it would not provide MPERS the cost savings it would otherwise have had. Due to the
very small number of individuals who this might apply to, MPERS does not expect more than a
minimal fiscal impact. This fiscal impact for the changes above are minimal but impossible to
determine.
Oversight notes MOSERS and MPERS indicated this proposal could result in increased costs.
These costs assumed by the retirement system may or may not impact the employer contribution
rate for state agencies. Oversight will show a range of impact of $0 (no change in employer
contribution rates) to an unknown cost (increase in employer contribution rates) from this
proposal. Oversight assumes this proposal would impact so few people that any potential cost
would likely be less than the $250,000 threshold annually. For simplicity, Oversight will show a
cost to the General Revenue fund but notes Federal Funds and various other state funds are also
used to fund employee benefits.
House Amendment 6 – Sheriffs’ Retirement System
In response to a similar proposal, HCS for HB 934 (2023), officials from the Sheriffs’
Retirement System stated the general assembly and the governing body of a county may
appropriate funds for deposit to the retirement fund. It also allows the board to accept gift,
donations, grants and bequests from public or private sources. These are not mandates;
therefore, the net increase for the Missouri Sheriffs' Retirement System is estimating this as $0 to
unknown.
The 5% member contribution from all active Sheriffs will generate revenue annually. The
current year estimate is approximately $425,000. The increase in annuity to $1,000 monthly as
the minimum would cost the system approximately $17,000 per month or approximately
$204,000 annually in 2023. Therefore, the net increase for Missouri Sheriffs' Retirement Fund
would be $221,000 to unknown.
Oversight notes the costs and gains assumed by the retirement system may or may not impact
the employer contribution rate of local sheriffs. Oversight will show a range of impact to local
sheriffs of $0 (no change in contribution rates) to an unknown savings (reduction in contribution
rates) to an unknown cost (increase in contribution rates). L.R. No. 0715H.03P
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In response to a similar proposal, HCS for HB 934 (2023), officials from the County Employees
Retirement Fund (CERF) state they are unsure as to how the language in section 57.991
subsection 2 would be interpreted and administered, in part due to a lack of definitions for some
of the terms.
In order to provide a response to Fiscal Oversight, CERF will assume that subsection 2 might be
interpreted to require another retirement system that an individual has been a member of to pay
for a share of the member’s disability retirement, death benefits and refund of contributions.
However, CERF notes that subsection 2 does not specify the timing of the individual’s
membership in another retirement system as it relates to the individual’s membership in the
Sheriffs’ Retirement System. CERF assumes that the use of the phrase “member of another state
or local retirement or pension system” would apply to individuals who are active employee
members of another retirement system concurrently with their membership in the Sheriffs’
Retirement Fund as well as individuals who are no longer active employee members of another
retirement system but have earned a vested pension benefit in the past.
Under current law, section 50.1000(8), county sheriffs covered by the Sheriffs’ Retirement Fund
do not participate in CERF. However, some county sheriffs have earned a vested pension benefit
with CERF from having previously worked for a county as a deputy sheriff. CERF assumes that
the language on page 4 lines 13 -18, in which eligibility for and calculation of disability
retirement, death benefits, and refund of contributions is governed by the provisions of the
retirement system to which the member last made contributions, might be interpreted to require
CERF to pay a share of a member’s disability retirement, death benefit, or refund of
contributions because some sheriffs previously served as deputy sheriffs and made contributions
to CERF.
Accordingly, if this language were interpreted and administered in this manner, CERF assumes
that it would have an unknown but negative impact. It is difficult to quantify such impact in
terms of dollars.
In response to a similar proposal, HCS for HB 934 (2023), officials from the Local Government
Employees Retirement System assumed the proposal would have no fiscal impact on their
organization.
Oversight is uncertain if section 57.991 subsection 2 of this proposal would impact other local
retirement systems. For purposes of this fiscal note, Oversight assumes any impact to other
retirement systems would be immaterial. If this assumption is incorrect, this could potentially
change the fiscal impact as presented in this fiscal note.
In response to a similar proposal, officials from the Office of Administration - Budget and
Planning assumed the proposal would have no fiscal impact on their organization.
Oversight assumes the General Assembly and the governing body of a county may appropriate
funds to the Sheriffs’ Retirement Fund. L.R. No. 0715H.03P
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Responses regarding the proposed legislation as a whole
Officials from the Joint Committee on Public Employee Retirement (JCPER) state this
proposal has no direct fiscal impact to the Joint Committee on Public Employee Retirement.
The JCPER’s review of this proposal indicates that its provisions may constitute a “substantial
proposed change” in future plan benefits as defined in section 105.660(10). It is impossible to
accurately determine the fiscal impact of this legislation without an actuarial cost statement
prepared in accordance with section 105.665.
Pursuant to section 105.670, an actuarial cost statement must be filed with the Chief Clerk of the
House of Representatives, the Secretary of the Senate, and the Joint Committee on Public
Employee Retirement as public information for at least five legislative days prior to final
passage.
Rule Promulgation
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
In response to similar proposals, officials from the Office of the Secretary of State (SOS) noted
many bills considered by the General Assembly include provisions allowing or requiring
agencies to submit rules and regulations to implement the act. The SOS is provided with core
funding to handle a certain amount of normal activity resulting from each year's legislative
session. The fiscal impact for this fiscal note to the SOS for Administrative Rules is less than
$5,000. The SOS recognizes that this is a small amount and does not expect that additional
funding would be required to meet these costs. However, the SOS also recognizes that many
such bills may be passed by the General Assembly in a given year and that collectively the costs
may be in excess of what the office can sustain with its core budget. Therefore, the SOS reserves
the right to request funding for the cost of supporting administrative rules requirements should
the need arise based on a review of the finally approved bills signed by the governor. L.R. No. 0715H.03P
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FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026GENERAL REVENUERevenue Loss - from pre-tax
contributions that otherwise would have
been taxed (p. 3-4)
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
Transfer Out - to Show-Me My-
Retirement Savings Fund – to start up /
administer the program (p. 3-5)
$0 to
(Unknown,
Could exceed
$2,000,000)
$0 to
(Unknown,
Could exceed
$2,000,000)
$0 to
(Unknown,
Could exceed
$2,000,000)
Costs - increase in employer
contributions for members now
receiving benefits that otherwise would
not have - §104.380 & §104.1039 –
HA5 – p.12-13$0
$0 or
(Unknown)
$0 or
(Unknown)
Costs – any potential appropriation to
the Sheriffs’ Retirement Fund –
§57.952 – HA6 – p.13-14$0
$0 or
(Unknown)
$0 or
(Unknown)
ESTIMATED NET EFFECT ON
GENERAL REVENUE
$0 to
(Unknown,
Could exceed
$2,000,000)
$0 to
(Unknown,
Could exceed
$2,000,000)
$0 to
(Unknown,
Could exceed
$2,000,000) L.R. No. 0715H.03P
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SHOW-ME MYRETIREMENT
SAVINGS ADMINISTRATIVE
FUND
Revenue Gain - from fees, gifts,
donations or other funds (p. 3-4)$0 or Unknown$0 or Unknown$0 or Unknown
Transfer In - from General Revenue
$0 to
Unknown,
Could exceed
$2,000,000
$0 to
Unknown,
Could exceed
$2,000,000
$0 to
Unknown,
Could exceed
$2,000,000
Cost – STO$0 or …$0 or …$0 or … Personal Service($75,983)($92,092)($93,013) Fringe Benefits($48,572)($58,618)($58,953) Expense & Equipment($28,500)($10,918)($11,246)Total Cost – STO($153,055)($161,628)($163,212)FTE Change – STO0 or 2 FTE0 or 2 FTE0 or 2 FTE
Costs - Board - administrative, travel
expenses, legal, IT, staff and other start-
up costs (p. 3)
$0 or
(Unknown,
Could exceed
$1,782,551)
$0 or
(Unknown,
Could exceed
$1,760,327)
$0 or
(Unknown,
Could exceed
$1,757,964)
ESTIMATED NET EFFECT ON
SHOW-ME MYRETIREMENT
SAVINGS ADMINISTRATIVE
FUND
$0 or
Unknown
$0 or
Unknown
$0 or
Unknown
Estimated Net FTE Change on the
Show-Me My-Retirement
Administrative Fund0 or 2 FTE0 or 2 FTE0 or 2 FTE L.R. No. 0715H.03P
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FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026LOCAL POLITICAL
SUBDIVISION
Cost Avoidance – School Districts -
reduction in actuarially determined
contributions for PSRS - §169.070 &
§169.560 – HA3 – p.10$0
$0 to
$10,400,000
$0 to
$10,400,000
Costs – an appropriation from the
governing body of a county - §57.952 -
HA6 – p.13-14$0
$0 or
(Unknown)
$0 or
(Unknown)
Costs/Savings - from increased or
reduced employer contributions -
§57.952, §57.961 & §57.967 - HA6
p.13-14$0
$0 or Unknown
to (Unknown)
$0 or Unknown
to (Unknown)
ESTIMATED NET EFFECT ON
LOCAL POLITICAL
SUBDIVISIONS$0
$0 or
Could exceed
$10,400,000 to
(Unknown)
$0 or
Could exceed
$10,400,000 to
(Unknown)
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
This proposal modifies provisions related to retirement systems.
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
Office of the State Treasurer
Office of Administration - Budget and Planning
Office of the Governor
Department of Revenue
Missouri Senate
Missouri House of Representatives L.R. No. 0715H.03P
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Office of the Secretary of State
Joint Committee on Administrative Rules
Missouri State Employee's Retirement System
MoDOT & Patrol Employees’ Retirement System
Public Schools and Education Employee Retirement Systems
Sheriffs’ Retirement System
St. Louis Police Retirement System
Joint Committee on Public Employee Retirement
County Employees’ Retirement System
Local Government Employees Retirement System
Julie MorffRoss StropeDirectorAssistant DirectorApril 13, 2023April 13, 2023