Modifies the total cost of living adjustments for members of the Public School Retirement System and the Public Education Employee Retirement System
Impact
The implications of SB 1421 are significant, as it alters the financial structure of retirement benefits for public school employees. The retirement allowance will be tied closely to the overall investment performance of the pension fund, which could potentially lead to reduced benefits for retirees in years of poor investment returns. This could create a situation where retired teachers and school staff find themselves with static or declining purchasing power due to limited cost of living adjustments, particularly affecting those who rely heavily on these pensions for their livelihoods.
Summary
Senate Bill 1421 aims to amend the provisions related to retirement allowances for certain public school employees in Missouri by repealing existing sections and enacting new ones. The bill introduces a stricter limitation on cost of living increases for retirement allowances, which apply to members who have retired with a specific combination of age and years of service. Notably, it specifies that annual increases shall not exceed one percent per year and are contingent upon the performance of the system's investments. This shift underscores a move towards greater fiscal responsibility within the state's pension system.
Contention
Supporters of SB 1421 argue that it addresses the growing financial challenges within the state's pension system, aimed at ensuring its long-term viability. However, opponents highlight concerns that the changes may disproportionately affect retired educators who depend on these allowances. The limits on cost-of-living adjustments could be viewed as a form of pension austerity that undermines the financial security of retirees, raising questions about fairness and the state's moral obligation to its retired educators.
Modifies provisions relating to Missouri Department of Transportation and Highway Patrol Employees' Retirement System and Missouri State Employees' Retirement System
Provides for an increase of retirement benefits from the Public School Retirement System and Public Education Employee Retirement System for certain members electing reduced monthly payments before separation with a same-sex domestic partner
Modifies provisions relating to prosecuting attorneys, including classification as state employees and the transfer of the Prosecuting Attorneys and Circuit Attorneys' Retirement System to the Missouri State Employees' Retirement System
Modifies the actuarial amortization and cost methods for the Missouri State Employees' Retirement System and the Missouri Department of Transportation and Highway Patrol Employees' Retirement System