COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2504H.02C Bill No.:HCS for HB 1153 Subject:Education, Elementary and Secondary; Department of Elementary and Secondary
Education; Children and Minors; Teachers; Licenses - Miscellaneous
Type:Original Date:March 7, 2025Bill Summary:This proposal authorizes the State Board of Education to issue certificates of
license to teach upon certification by Teachers for Tomorrow.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on General
Revenue $0$0$0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 2504H.02C
Bill No. HCS for HB 1153
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on FTE 000
☐ 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 2026FY 2027FY 2028Local Government$0$0$0 L.R. No. 2504H.02C
Bill No. HCS for HB 1153
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FISCAL ANALYSIS
ASSUMPTION
§§ 168.21 and 168.036 - Granting Substitute Teacher Certificates
Officials from Public Education Employees’ Retirement System (PSRS/PEERS) assume this
bill, as currently drafted, extends the temporary provision allowing individuals who are receiving
a retirement benefit from PSRS or PEERS to substitute teach on a part-time or temporary
substitute basis in a covered school district without a discontinuance of the person's retirement
benefit. The provisions in this bill only apply to part-time or temporary substitute teaching. As
specified in this bill, if an individual chooses to work for a covered employer after retirement
under this provision, they will not contribute to additional retirement benefits.
This provision was enacted in 2022 with an expiration of June 30, 2025. This bill extends the
temporary provision through June 30, 2030.
The Systems have an actuary firm, PwC US (PwC), that prepares actuarial cost statements on
any proposed legislation as well as the annual actuarial valuation reports for the Systems. As
discussed in more detail below, the temporary suspension of the working after retirement
limitations as proposed in this bill could have a fiscal impact on PSRS and PEERS.
Analysis of impact on PSRS
The 550-hour and 50% of compensation limitations applicable to retired PSRS members who
return to work in substitute teaching positions is significantly less than half of the capacity
worked by a fulltime teacher and therefore limits the work a rehired retiree can perform in a
substitute teaching position without a suspension of their benefit. Suspending these limitations
through June 30, 2030 could incentivize existing PSRS members to significantly change their
retirement behavior and career planning. In addition, an extension of the working after retirement
limits suspension would give employers a greater ability to replace full-time active employees
with rehired retirees, allowing employers to save on the cost of contributions to PSRS (for part-
time or temporary substitute teaching positions). Such behavior could have a significant impact
on the cost of PSRS as earlier retirement by active members could increase the Actuarial
Accrued Liability, and therefore the Unfunded Actuarial Accrued Liability, and result in a
decrease in covered payroll which would increase the Actuarially Determined Contribution Rate.
However, HCS/HB 1153 does include some conditions that would limit the fiscal impact,
including:
• The end date for suspension of the working after retirement limitations of June 30, 2030
would limit any changes in retirement behavior and any changes in employer hiring to a
temporary period (absent further extensions).
• Retirees who return to work in substitute teaching positions would only be able to return
on a part-time or temporary basis, not on a full-time basis. L.R. No. 2504H.02C
Bill No. HCS for HB 1153
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In addition, current statistical data on retired PSRS members who have returned to work since
the temporary suspension of the limits went into effect in 2022 has been reviewed. The COVID
pandemic and other legislation affecting working after retirement make it difficult to conclude
from the data whether retirement patterns have been affected by the current suspension.
However, to date, it does not appear to indicate a significant change in retirement behavior by
members or hiring practices by employers as the number of retirees working after retirement
remains below pre-pandemic levels. However, there is a recent increase in the average hours
worked and average earnings by retirees who have returned to work due to some rehired retirees
working in a capacity that would have exceeded the limitations of RSMo 169.560 if not for the
suspension of those limits for part-time or temporary substitute teaching in RSMo 168.036.
For the reasons noted above and discussed in the actuarial cost estimate, PwC estimates the
impact of extending the suspension of limitations on working after retirement for parttime or
temporary substitute teaching positions through June 30, 2030 to be an insignificant fiscal
impact if retirement behavior remains unchanged. However, there would be a fiscal cost if
there is a change in active member retirement behavior to retire earlier, resulting in fewer full-
time teachers participating in, and contributing to, PSRS, and they continue to caution that the
fiscal impact could be significant if the suspension of the limitations continues to be extended
and effectively becomes a permanent provision.
Analysis of impact on PEERS
The 550-hour limitation applicable to retired PEERS members who return to work in substitute
teaching positions is significantly less than half of the capacity worked by a full-time employee
and therefore limits the work a rehired retiree can perform without a suspension of their benefit.
Suspending these limitations through June 30, 2030 for part-time or temporary substitute
teaching positions could incentivize existing PEERS members to significantly change their
retirement behavior and career planning. In addition, an extension of the working after retirement
limits suspension would give employers a greater ability to replace full-time active employees
with rehired retirees, allowing employers to save on the cost of contributions to PEERS (for part-
time or temporary substitute teaching positions). Such behavior could have a significant impact
on the cost of PEERS as earlier retirement by active members could increase the Actuarial
Accrued Liability, and therefore the Unfunded Actuarial Accrued Liability, and result in a
decrease in covered payroll which would increase the Actuarially Determined Contribution Rate.
However, HCS/HB 1153 does include some conditions that would limit the fiscal impact,
including:
• The end date for suspension of the working after retirement limitations of June 30, 2030
would limit any changes in retirement behavior and any changes in employer hiring to a
temporary period (absent further extensions).
• Retirees who return to work in substitute teaching positions would only be able to return
on a part-time or temporary basis, not on a full-time basis.
• The number of PEERS retirees who are certificated and eligible to fill substitute teaching
positions has historically been very few. L.R. No. 2504H.02C
Bill No. HCS for HB 1153
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In addition, current statistical data on retired PEERS members who have returned to work since
the temporary suspension of the limits went into effect in 2022 has been reviewed. The COVID
pandemic and other legislation affecting working after retirement make it difficult to conclude
from the data whether retirement patterns have been affected. However, to date, it does not
appear to indicate a significant change in retirement behavior by members or hiring practices by
employers, or an increase in the number of PEERS retirees being hired to fill part-time or
temporary substitute teaching positions.
For the reasons noted above and discussed in the actuarial cost estimate, PwC estimates the
impact of extending the suspension of limitations on working after retirement for parttime or
temporary substitute teaching positions through June 30, 2030 to be an insignificant fiscal
impact to PEERS. However, they continue to caution that the fiscal impact could be significant
if the suspension of the limitations continues to be extended and effectively becomes a
permanent provision.
PSRS/PEERS provide retirement benefits to approximately 132,000 active members and over
110,000 retired Missouri public school teachers, school employees, and their families. The total
invested assets of both PSRS and PEERS were $58.7 billion as of June 30, 2024.
Oversight notes this provision was enacted in 2022 with an expiration of June 30, 2025. This
proposal extends the temporary provision through June 30, 2030. Therefore, Oversight assumes
the temporary change will result in an insignificant fiscal impact to PSRS/PEERS and therefore,
no impact to member employers.
In response to similar legislation, HB 712 (2025), officials from Joint Committee on Public
Employee Retirement assumed the review of HB 712 indicates it would not create a
“substantial proposed change” in future plan benefits as defined in Section 105.660(10).
Officials from the Department of Elementary and Secondary Education, University of
Missouri System and the
both assume the proposal will have no fiscal impact on their organization. Oversight does not
have any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal
note for these organizations.
In response to a previous version, officials from the Northwest Missouri State University
assumed the proposal would have no fiscal impact on their organization. Oversight does not
have any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal
note.
Officials from the University of Central Missouri
impact on their organization.
Oversight notes this bill authorizes the State Board of Education to issue a Missouri teaching
certificate for individuals certified by Teachers of Tomorrow. Missouri is already allowing L.R. No. 2504H.02C
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teachers to gain certification through the American Board for Certification of Teacher
Excellence, this legislation just extends the accepted certification to Teachers of Tomorrow.
Therefore, Oversight will reflect a zero impact in the fiscal note.
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.
Officials from the Office of the Secretary of State (SOS) note 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.
FISCAL IMPACT – State GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0FISCAL IMPACT – Local GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
The proposed legislation appears to have no direct fiscal impact. L.R. No. 2504H.02C
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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
Department of Elementary and Secondary Education
Department of Higher Education and Workforce Development
Office of the Secretary of State
University of Missouri
Joint Committee on Administrative Rules
Northwest Missouri State University
University of Central Missouri
Julie MorffJessica HarrisDirectorAssistant DirectorMarch 7, 2025March 7, 2025