EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
FIRST REGULAR SESSION
SENATE COMMITTEE SUBSTITUTE FOR
HOUSE BILL NO. 147
103RD GENERAL ASSEMBLY
0295S.03C KRISTINA MARTIN, Secretary
AN ACT
To repeal sections 70.630, 70.655, 70.680, 70.690, 70.745, 70.746, 70.747, 86.200, 87.140,
87.145, 87.155, 87.260, 87.350, 105.688, and 143.124, RSMo, and to enact in lieu
thereof eighteen new sections relating to retirement.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Sections 70.630, 70.655, 70.680, 70.690, 1
70.745, 70.746, 70.747, 86.200, 87.140, 87.145, 87.155, 87.260, 2
87.350, 105.688, and 143.124, RSMo, are repealed and eighteen 3
new sections enacted in lieu thereof, to be known as sections 4
70.630, 70.655, 70.680, 70.690, 70.745, 70.746, 70.747, 70.748, 5
86.200, 87.140, 87.145, 87.155, 87.260, 87.350, 105.688, 6
105.692, 105.693, and 143.124, to read as follows:7
70.630. 1. The membership of the system shall include 1
the following persons: 2
(1) All employees who are neither policemen nor 3
firemen who are in the employ of a political subdivision the 4
day preceding the date such political subdivision becomes an 5
employer and who continue in such employ on and after such 6
date shall become members of the system. 7
(2) All persons who become employed by a political 8
subdivision as neither policemen nor firemen on or after the 9
date such political subdivision becomes an employer shall 10
become members of the system. 11 SCS HB 147 2
(3) If his employing political subdivision has elected 12
to cover present and future po licemen, all policemen who are 13
in the employ of a political subdivision the day preceding 14
the date such political subdivision covers policemen 15
hereunder and who continue in such employ as a policeman on 16
and after such date, and all persons who become e mployed by 17
a political subdivision as a policeman on or after the date 18
the political subdivision covers policemen shall become 19
members of the system. 20
(4) If his employing political subdivision has elected 21
to cover only future policemen, all perso ns who become 22
employed by a political subdivision as a policeman on or 23
after the date such political subdivision covers policemen 24
hereunder shall become members of the system. 25
(5) If his employing political subdivision has elected 26
to cover present and future firemen, all firemen who are in 27
the employ of a political subdivision the day preceding the 28
date such political subdivision covers firemen hereunder and 29
who continue in such employ as a fireman on and after such 30
date, and all persons who b ecome employed by a political 31
subdivision as a fireman on or after the date the political 32
subdivision covers firemen hereunder shall become members of 33
the system. 34
(6) If his employing political subdivision has elected 35
to cover only future firemen , all persons who become 36
employed by a political subdivision as a fireman on or after 37
the date such political subdivision covers firemen hereunder 38
shall become members of the system. 39
2. [In no event shall an employee become a member if 40
continuous employment to time of retirement will leave the 41
employee with less than minimum number of years of credited 42
service specified in section 70.645. 43 SCS HB 147 3
3.] In any case of question as to the system 44
membership status of any person, the board shall decide the 45
question. 46
70.655. 1. Upon a member's retirement he or she shall 1
receive an allowance for life in accordance with the 2
applicable benefit program elected by the member's employer, 3
as follows: 4
(1) Benefit program L-1. A member with credited 5
service covered by benefit program L -1 shall receive an 6
allowance for life equal to one percent of the member's 7
final average salary multiplied by the number of years of 8
such credited service; 9
(2) Benefit program L-3. A member with credited 10
service covered by benefit program L -3 shall receive an 11
allowance for life equal to one and one -quarter percent of 12
the member's final average salary multiplied by the number 13
of years of such credited service; 14
(3) Benefit program LT-4. A member with credited 15
service covered by benefit program LT -4 shall receive an 16
allowance for life equal to one percent of the member's 17
final average salary multiplied by the number of years of 18
such credited service. In addition, if such member is 19
retiring as provided in section 70.645 or section 70.650 or 20
section 70.670, and if such member's age at retirement is 21
younger than age sixty -two, then such member shall receive a 22
temporary allowance equal to one percent of the member's 23
final average salary multiplied by the number of years of 24
such credited service. Such temporary allowance shall 25
terminate at the end of the calendar month in which the 26
earlier of the following events occurs: such member's 27
death; or the member's attainment of age s ixty-two; 28 SCS HB 147 4
(4) Benefit program LT-5. A member with credited 29
service covered by benefit program LT -5 shall receive an 30
allowance for life equal to one and one -quarter percent of 31
the member's final average salary multiplied by the number 32
of years of such credited service. In addition, if such 33
member is retiring as provided in section 70.645 or section 34
70.650 or section 70.670, and if such member's age at 35
retirement is younger than age sixty -two, then such member 36
shall receive a temporary allowan ce equal to three-quarters 37
of one percent of the member's final average salary 38
multiplied by the number of years of such credited service. 39
Such temporary allowance shall terminate at the end of the 40
calendar month in which the earlier of the following events 41
occurs: such member's death; or the member's attainment of 42
age sixty-two; 43
(5) Benefit program L-6. A member with credited 44
service covered by benefit program L -6 shall receive an 45
allowance for life equal to two percent of the member's 46
final average salary multiplied by the number of years of 47
such credited service; 48
(6) Benefit program L-7. A member with credited 49
service covered by benefit program L -7 shall receive an 50
allowance for life equal to one and one -half percent of the 51
member's final average salary multiplied by the number of 52
years of such credited service; 53
(7) Benefit program LT-8. A member with credited 54
service covered by benefit program LT -8 shall receive an 55
allowance for life equal to one and one -half percent of the 56
member's final average salary multiplied by the number of 57
years of such credited service. In addition, if such member 58
is retiring as provided in section 70.645 or section 70.650 59
or section 70.670, and if such member's age at retirement is 60 SCS HB 147 5
younger than age sixty-two, then such member shall receive a 61
temporary allowance equal to one -half of one percent of the 62
member's final average salary multiplied by the number of 63
years of such credited service. Such temporary allowance 64
shall terminate at the end of the calendar month in which 65
the earlier of the following events occurs: such member's 66
death; or the member's attainment of age sixty -two; 67
(8) Benefit program LT-4(65). A member with credited 68
service covered by benefit program LT -4(65) shall receive an 69
allowance for life equal to one percent of the member's 70
final average salary multiplied by the number of years of 71
such credited service. In addition, if such member is 72
retiring as provided in section 70.645 or section 70.650 or 73
section 70.670, and if such member's age at retirement is 74
younger than age sixty -five, then such member shall receive 75
a temporary allowance equal to one percent of the member's 76
final average salary multiplied by the number of years of 77
such credited service . Such temporary allowance shall 78
terminate at the end of the calendar month in which the 79
earlier of the following events occurs: such member's death; 80
or the member's attainment of age sixty -five; 81
(9) Benefit program LT-5(65). A member with credited 82
service covered by benefit program LT -5(65) shall receive an 83
allowance for life equal to one and one -quarter percent of 84
the member's final average salary multiplied by the number 85
of years of such credited service. In addition, if such 86
member is retiring as provided in section 70.645 or section 87
70.650 or section 70.670, and if such member's age at 88
retirement is younger than age sixty -five, then such member 89
shall receive a temporary allowance equal to three -quarters 90
of one percent of the member' s final average salary 91
multiplied by the number of years of such credited service. 92 SCS HB 147 6
Such temporary allowance shall terminate at the end of the 93
calendar month in which the earlier of the following events 94
occurs: such member's death; or the member's atta inment of 95
age sixty-five; 96
(10) Benefit program LT-8(65). A member with credited 97
service covered by benefit program LT -8(65) shall receive an 98
allowance for life equal to one and one -half percent of the 99
member's final average salary multiplied by the number of 100
years of such credited service. In addition, if such member 101
is retiring as provided in section 70.645 or section 70.650 102
or section 70.670, and if such member's age at retirement is 103
younger than age sixty -five, then such member shall rece ive 104
a temporary allowance equal to one -half of one percent of 105
the member's final average salary multiplied by the number 106
of years of such credited service. Such temporary allowance 107
shall terminate at the end of the calendar month in which 108
the earlier of the following events occurs: such member's 109
death; or the member's attainment of age sixty -five; 110
(11) Benefit program L-9. A member with credited 111
service covered by benefit program L -9 shall receive an 112
allowance for life equal to one and six -tenths percent of 113
the member's final average salary multiplied by the number 114
of years of such credited service; 115
(12) Benefit program LT-10(65). A member with 116
credited service covered by benefit program LT -10(65) shall 117
receive an allowance for lif e equal to one and six -tenths 118
percent of the members' final average salary multiplied by 119
the number of years of such credited service. In addition, 120
if such member is retiring as provided in section 70.645 or 121
section 70.650 or section 70.670, and if su ch member's age 122
at retirement is younger than age sixty -five, then such 123
member shall receive a temporary allowance equal to four - 124 SCS HB 147 7
tenths of one percent of the member's final average salary 125
multiplied by the number of years of such credited service. 126
Such temporary allowance shall terminate at the end of the 127
calendar month in which the earlier of the following events 128
occurs: such member's death; or the member's attainment of 129
age sixty-five; 130
(13) Benefit program L-11. Benefit program L-11 may 131
cover employment in a position only if such position is not 132
concurrently covered by federal Social Security; in 133
addition, if such position was previously covered by federal 134
Social Security, benefit program L -11 may cover only 135
employment rendered after c essation of federal Social 136
Security coverage. A member with credited service covered 137
by benefit program L -11 shall receive an allowance for life 138
equal to two and one -half percent of the member's final 139
average salary multiplied by the number of years o f such 140
credited service; 141
(14) Benefit program L-12. A member with credited 142
service covered by benefit program L -12 shall receive an 143
allowance for life equal to one and three -quarter percent of 144
the member's final average salary multiplied by the number 145
of years of such credited service; 146
(15) Benefit program LT-14(65). A member with 147
credited service covered by benefit program LT -14(65) shall 148
receive an allowance for life equal to one and three -quarter 149
percent of the member's final averag e salary multiplied by 150
the number of years of such credited service. In addition, 151
if such member is retiring as provided in section 70.645, 152
70.650, or 70.670, then such member shall receive a 153
temporary allowance equal to one -quarter of one percent of 154
the member's final average salary multiplied by the number 155
of years of such credited service. Such temporary allowance 156 SCS HB 147 8
shall terminate at the end of the calendar month in which 157
the earlier of the following events occurs: such member's 158
death or the member's attainment of age sixty -five. 159
2. If each portion of a member's credited service is 160
not covered by the same benefit program, then the member's 161
total allowance for life shall be the total of the allowance 162
for life determined under each appli cable benefit program. 163
3. Each employer shall have the credited service of 164
each of its members covered by benefit program L -1 provided 165
for in this section unless such employer shall have elected 166
another benefit program provided for in this section . 167
4. Except as otherwise provided in this subsection, 168
each political subdivision, by majority vote of its 169
governing body, may elect from time to time to cover its 170
members, whose political subdivision employment is 171
concurrently covered by federal Social Security, under one 172
of the benefit programs provided for in this section. Each 173
political subdivision, by majority vote of its governing 174
body, may elect from time to time to cover its members, 175
whose political subdivision employment is not concur rently 176
covered by federal Social Security, under one of the benefit 177
programs provided for in this section. The clerk or 178
secretary of the political subdivision shall certify the 179
election of the benefit program to the board within ten days 180
after such vote. The effective date of the political 181
subdivision's benefit program is the first day of the 182
calendar month specified by such governing body, or the 183
first day of the calendar month next following receipt by 184
the board of the certification of election of benefit 185
program, or the effective date of the political subdivision 186
becoming an employer, whichever is the latest. Such 187
election of benefit program may be changed from time to time 188 SCS HB 147 9
by such vote, but not more often than biennially. If such 189
changed benefit program provides larger allowances than the 190
benefit program previously in effect, then such larger 191
benefit program shall be applicable to the past and future 192
employment with the employer by present and future 193
employees. If such changed benef it program provides smaller 194
allowances than the benefit program previously in effect, 195
then such changed benefit program shall be applicable only 196
to credited service for employment rendered from and after 197
the effective date of such change. After August 28, 1994, 198
political subdivisions shall not elect coverage under 199
benefit program LT-4, benefit program LT -5, or benefit 200
program LT-8. After August 28, 2005, political subdivisions 201
shall not elect coverage under benefit program L -9 or 202
benefit program LT-10(65). 203
5. Should an employer change its election of benefit 204
program as provided in this section, the employer 205
contributions shall be correspondingly changed effective the 206
same date as the benefit program change. 207
6. The limitation on incr eases in an employer's 208
contribution provided by subsection 6 of section 70.730 209
shall not apply to any contribution increase resulting from 210
an employer electing a benefit program which provides larger 211
allowances. 212
7. Subject to the provisions of su bsections 8 and 9 213
[and 10] of this section, for an allowance becoming 214
effective on September 28, 1975, or later, and beginning 215
with the October first which is at least twelve full months 216
after the effective date of the allowance, the amount of the 217
allowance shall be redetermined effective each October first 218
and such redetermined amount shall be payable for the 219
ensuing year. Subject to the limitations stated in the next 220 SCS HB 147 10
sentence, such redetermined amount shall be the amount of 221
the allowance otherwi se payable multiplied by the following 222
percent: one hundred percent, plus two percent for each 223
full year (excluding any fraction of a year) in the period 224
from the effective date of the allowance to the current 225
October first. In no event shall such re determined amount 226
(1) be less than the amount of the allowance otherwise 227
payable nor (2) be more than the amount of the allowance 228
otherwise payable multiplied by the following fraction: the 229
numerator shall be the Consumer Price Index for the month of 230
June immediately preceding such October first (but in no 231
event an amount less than the denominator below) and the 232
denominator shall be the Consumer Price Index for the month 233
of June immediately preceding the effective date of the 234
allowance. As used herein, "Consumer Price Index" means a 235
measure of the Consumer Price Index [for Urban Wage Earners 236
and Clerical Workers, ] as determined by the United States 237
Department of Labor and adopted by the board of trustees [in 238
effect January 1, 1975; provided, s hould such Consumer Price 239
Index be restructured subsequent to 1974 in a manner 240
materially changing its character, the board shall change 241
the application of the Consumer Price Index so that as far 242
as is practicable the 1975 intent of the use of the Cons umer 243
Price Index shall be continued ]. As used herein "the amount 244
of the allowance otherwise payable" means the amount of the 245
allowance which would be payable without regard to these 246
provisions redetermining allowance amounts after retirement. 247
8. [Subject to the provisions of subsections 9 and 10 248
of this section, for an allowance becoming effective on 249
September 28, 1975, or later, the maximum allowance payable 250
under the provisions of section 70.685 shall be redetermined 251
each October first in t he same manner as an allowance is 252 SCS HB 147 11
redetermined under the provisions of subsection 7 of this 253
section. 254
9.] (1) The system establishes reserves for the 255
payment of future allowances to retirants and 256
beneficiaries. Should the board determine, after consulting 257
with the actuary, that the established reserves are more 258
than sufficient to provide such allowances, the board may 259
increase the annual increase rate provided for in 260
[subsections] subsection 7 [and 8] of this section, as it 261
applies to any allowance payable, but in no event shall the 262
total of all redetermined amounts as of October first of any 263
year be greater than one hundred four percent of the 264
allowances which would have been payable that October first 265
without such redeterminations; prov ided, as of any 266
redetermination date the same annual increase rate shall be 267
applied to all allowances with effective dates in the range 268
of November first to October first of the following year. 269
The board may extend the provisions of [subsections] 270
subsection 7 [and 8] of this section to allowances which 271
became effective before September 28, 1975; provided such an 272
action by the board shall not increase an employer 273
contribution rate then in effect; 274
(2) After August 28, 1993, the annual increase rate 275
established by this subsection shall be a compound rate, 276
compounded annually, and the four percent annual maximum 277
rate shall also be a compound rate, compounded annually; 278
provided, the use of such compounding shall not begin until 279
October 1, 1993, and shall not affect redeterminations made 280
prior to that date. 281
[10.] 9. Should the board determine that the 282
provisions of subsections 7 [, 8] and [9] 8 of this section 283
are jeopardizing the financial solvency of the system, the 284 SCS HB 147 12
board shall suspend these provisions redetermining allowance 285
amounts after retirement for such periods of time as the 286
board deems appropriate. 287
70.680. 1. Any member in service with five or more 1
years of credited service who has not attained the age a nd 2
service requirements of section 70.645 and who becomes 3
totally and permanently physically or mentally incapacitated 4
for his duty as an employee, as the result of a personal 5
injury or disease, may be retired by the board upon written 6
application filed with the board by or on behalf of the 7
member; provided, that after a medical examination of such 8
member made by or under the direction of a medical committee 9
consisting of three physicians, one of whom shall be 10
selected by the board, one by or on be half of such member, 11
and the third by the first two physicians so named, the 12
medical committee reports to the board, by majority opinion 13
in writing, that such member is physically or mentally 14
totally incapacitated for the further performance of duty, 15
that such incapacity will probably be permanent and that 16
such member should be retired. 17
2. Upon disability retirement, as provided in 18
subsection 1 of this section, a member shall receive an 19
allowance for life provided for in section 70.655 and sha ll 20
have the right to elect an option provided for in section 21
70.660. His or her disability retirement and allowance 22
shall be subject to the provisions of subsection 5 of this 23
section [and to the provisions of section 70.685 ]. 24
3. Any member in service who becomes totally and 25
permanently physically or mentally incapacitated for his 26
duty as an employee, as the natural and proximate result of 27
a personal injury or disease which the board finds to have 28
arisen out of and in the course of his actual performance of 29 SCS HB 147 13
duty as an employee, may be retired by the board upon 30
written application filed with the board by or on behalf of 31
the member; provided, that after a medical examination of 32
such member made by or under the direction of a medical 33
committee consisting of three physicians, one of whom shall 34
be selected by the board, one by or on behalf of such 35
member, and the third by the first two physicians so named, 36
the medical committee reports to the board, by majority 37
opinion in writing, that such member is physically or 38
mentally totally incapacitated for the further performance 39
of duty, that such incapacity will probably be permanent, 40
and that such member should be retired. 41
4. Upon disability retirement as provided in 42
subsection 3 of this section, a member shall receive an 43
allowance for life provided for in section 70.655; provided, 44
that for the sole purpose of computing the amount of such 45
allowance, he or she shall be given credited service for the 46
period from the date of his or her d isability retirement to 47
the date he or she would attain age sixty. He or she shall 48
have the right to elect an option provided for in section 49
70.660. His or her disability retirement and allowance 50
shall be subject to the provisions of subsection 5 of this 51
section [and to the provisions of section 70.685 ]. 52
5. At least once each year during the first five years 53
following a member's retirement on account of disability, 54
and at least once in each three -year period thereafter, the 55
board shall require any disability retirant who has not 56
attained his minimum service retirement age to undergo a 57
medical examination to be made by a physician designated by 58
the board. If the retirant refuses to submit to medical 59
examination in any such period, his dis ability allowance 60
shall be suspended by the board until his withdrawal of such 61 SCS HB 147 14
refusal. If such refusal continues for one year, all his 62
rights in and to a disability allowance shall be revoked by 63
the board. If, upon medical examination of the retiran t, 64
the physician reports to the board that the retirant is 65
physically and mentally able and capable of resuming his 66
duty as an employee in the position held by him at the time 67
of his disability retirement, then the board shall, if 68
demanded by the reti rant, arrange a further medical 69
examination of such member made by or under the direction of 70
a medical committee consisting of three physicians, one of 71
whom shall be selected by the board, one by or on behalf of 72
the member, and the third by the first t wo physicians 73
named. Should the medical committee concur, by majority 74
opinion in writing to the board, the disability retirant is 75
capable of resumption of duty, his disability retirement 76
shall terminate and he shall be returned to duty and he 77
shall immediately again become a member of the system, his 78
credited service at the time of disability retirement shall 79
be restored to his credit, and the amount of his accumulated 80
contributions at the time of his disability retirement shall 81
be restored to his credit in the members deposit fund. If 82
he was in receipt of a duty disability allowance provided 83
for in subsection 3 of this section, he shall also be given 84
service credit for the period he was in receipt of the duty 85
disability allowance. 86
70.690. 1. In the event a member ceases to be a 1
member other than by death before the date he becomes 2
entitled to retire with an allowance payable by the system, 3
he shall be paid, upon his written application filed with 4
the board, his accumul ated contributions standing to his 5
credit in the members deposit fund. 6 SCS HB 147 15
2. In the event a member dies, and no allowance 7
becomes or will become payable by the system on account of 8
his death, his accumulated contributions standing to his 9
credit in the members deposit fund at the time of his death 10
shall be paid to such person or persons as he shall have 11
nominated by written designation duly executed and filed 12
with the board. If there be no such designated person or 13
persons surviving such member, such accumulated 14
contributions shall be paid to his surviving spouse, or to 15
his estate if there is no surviving spouse. 16
3. In the event a member's membership in the system 17
terminates, and no allowance becomes or will become payable 18
on his account, any accumulated contributions standing to 19
his credit in the members deposit fund unclaimed by such 20
member or his legal representative within [three] ten years 21
after the date his membership terminated, shall be 22
transferred to the income -expense fund. If thereafter 23
proper application is made for such accumulated 24
contributions, the board shall pay them from the income - 25
expense fund, but without interest after the date payment 26
was first due. 27
70.745. 1. The board shall be the trust ees of the 1
funds of the system. Subject to the provisions of any 2
applicable federal or state laws, the board shall have full 3
power to invest and reinvest the moneys of the system, and 4
to hold, purchase, sell, assign, transfer or dispose of any 5
of the securities and investments in which such moneys shall 6
have been invested, as well as the proceeds of such 7
investments and such moneys. 8
2. The board of trustees may deliberate about, or make 9
tentative or final decisions on, investments or other 10
financial matters in a closed meeting under chapter 610 if 11 SCS HB 147 16
disclosure of the deliberations or decisions would 12
jeopardize the ability to implement a decision or to achieve 13
investment objectives. A record of the retirement system 14
that discloses deliberati ons about, or a tentative decision 15
on, investments or other financial matters is not a public 16
record under chapter 610 to the extent and so long as its 17
disclosure would jeopardize the ability to implement a 18
decision or to achieve investment objectives. 19
70.746. Notwithstanding any other provision of law to 1
the contrary, the board of trustees may delegate to its duly 2
appointed investment counselor authority to act in place of 3
the board in the investment and reinvestment of all or pa rt 4
of the moneys of the system, and may also delegate to such 5
counselor the authority to act in place of the board in the 6
holding, purchasing, selling, assigning, transferring, or 7
disposing of any or all of the securities and investments in 8
which such moneys shall have been invested, as well as the 9
proceeds of such investments and such moneys. [Such 10
investment counselor shall be registered as an investment 11
advisor with the United States Securities and Exchange 12
Commission.] In exercising or delega ting its investment 13
powers and authority, members of the board shall exercise 14
ordinary business care and prudence under the facts and 15
circumstances prevailing at the time of the action or 16
decision. In so doing, the board shall consider the long - 17
and short-term needs of the system in carrying out its 18
purposes, the system's present and anticipated financial 19
requirements, the expected total return on the system's 20
investment, general economic conditions, income, growth, 21
long-term net appreciation, and probable safety of funds. 22
No member of the board shall be liable for any action taken 23
or omitted with respect to the exercise of or delegation of 24 SCS HB 147 17
these powers and authority if such member shall have 25
discharged the duties of his or her position in goo d faith 26
and with that degree of diligence, care, and skill which 27
prudent men and women would ordinarily exercise under 28
similar circumstances in a like position. 29
70.747. Notwithstanding any other provision of law to 1
the contrary, the board shall have full power to invest and 2
reinvest the funds and moneys of the system in improved real 3
estate, including collective real estate funds and real 4
estate investment trusts, wherever situated [; provided, 5
however, that not more than one -tenth of the funds and 6
moneys of the system at the time of such investment shall be 7
so invested]. 8
70.748. 1. Notwithstanding the provisions of section 1
105.662 to the contrary, the board may set up and maintain a 2
local government employ ee retirement systems of Missouri 3
investment fund account in which investment and reinvestment 4
of all or part of the moneys of the retirement system may be 5
placed and be available for investment purposes. 6
2. For the purpose of investing the funds of the 7
retirement system, the funds may be combined with the funds 8
of any retirement plan that is administered by the 9
retirement system under section 70.621 and any retirement 10
plan established for the purpose of providing benefits for 11
employees of the system, but the funds of each plan shall be 12
accounted for separately and for all other reporting 13
purposes shall be separate. 14
3. The board of trustees may promulgate such rules and 15
regulations consistent with the provisions of this section 16
as deemed necessary for its proper administration, pursuant 17
to the provisions of this section and this chapter. Any 18
rule or portion of a rule, as that term is defined in 19 SCS HB 147 18
section 536.010, that is created under the authority 20
delegated in this section shall be come effective only if it 21
complies with and is subject to all of the provisions of 22
chapter 536 and, if applicable, section 536.028. This 23
section and chapter 536 are nonseverable and if any of the 24
powers vested with the general assembly pursuant to cha pter 25
536 to review, to delay the effective date, or to disapprove 26
and annul a rule are subsequently held unconstitutional, 27
then the grant of rulemaking authority and any rule proposed 28
or adopted after August 28, 2025, shall be invalid and void. 29
86.200. The following words and phrases as used in 1
sections 86.200 to 86.366, unless a different meaning is 2
plainly required by the context, shall have the following 3
meanings: 4
(1) "Accumulated contributions", the sum of all 5
mandatory contributions deducted from the compensation of a 6
member and credited to the member's individual account, 7
together with members' interest thereon; 8
(2) "Actuarial equivalent", a benefit of equal value 9
when computed upon the basis of mortal ity tables and 10
interest assumptions adopted by the board of trustees; 11
(3) "Average final compensation": 12
(a) With respect to a member who earns no creditable 13
service on or after October 1, 2001, the average earnable 14
compensation of the member during the member's last three 15
years of creditable service as a police officer, or if the 16
member has had less than three years of creditable service, 17
the average earnable compensation of the member's entire 18
period of creditable service; 19
(b) With respect to a member who is not participating 20
in the DROP pursuant to section 86.251 on October 1, 2001, 21
who did not participate in the DROP at any time before such 22 SCS HB 147 19
date, and who earns any creditable service on or after 23
October 1, 2001, the average ear nable compensation of the 24
member during the member's last two years of creditable 25
service as a policeman, or if the member has had less than 26
two years of creditable service, then the average earnable 27
compensation of the member's entire period of credit able 28
service; 29
(c) With respect to a member who is participating in 30
the DROP pursuant to section 86.251 on October 1, 2001, or 31
whose participation in DROP ended before such date, who 32
returns to active participation in the system pursuant to 33
section 86.251, and who terminates employment as a police 34
officer for reasons other than death or disability before 35
earning at least two years of creditable service after such 36
return, the portion of the member's benefit attributable to 37
creditable service ea rned before DROP entry shall be 38
determined using average final compensation as defined in 39
paragraph (a) of this subdivision; and the portion of the 40
member's benefit attributable to creditable service earned 41
after return to active participation in the s ystem shall be 42
determined using average final compensation as defined in 43
paragraph (b) of this subdivision; 44
(d) With respect to a member who is participating in 45
the DROP pursuant to section 86.251 on October 1, 2001, or 46
whose participation in the DROP ended before such date, who 47
returns to active participation in the system pursuant to 48
section 86.251, and who terminates employment as a police 49
officer after earning at least two years of creditable 50
service after such return, the member's benefit attributable 51
to all of such member's creditable service shall be 52
determined using the member's average final compensation as 53
defined in paragraph (b) of this subdivision; 54 SCS HB 147 20
(e) With respect to a member who is participating in 55
the DROP pursuant to section 86.251 on October 1, 2001, or 56
whose participation in DROP ended before such date, who 57
returns to active participation in the system pursuant to 58
section 86.251, and whose employment as a police officer 59
terminates due to death or disability after such return, the 60
member's benefit attributable to all of such member's 61
creditable service shall be determined using the member's 62
average final compensation as defined in paragraph (b) of 63
this subdivision; and 64
(f) With respect to the surviving sp ouse or surviving 65
dependent child of a member who earns any creditable service 66
on or after October 1, 2001, the average earnable 67
compensation of the member during the member's last two 68
years of creditable service as a police officer or, if the 69
member has had less than two years of creditable service, 70
the average earnable compensation of the member's entire 71
period of creditable service; 72
(4) "Beneficiary", any person in receipt of a 73
retirement allowance or other benefit; 74
(5) "Board of trustees", the board provided in 75
sections 86.200 to 86.366 to administer the retirement 76
system; 77
(6) "Creditable service", prior service plus 78
membership service as provided in sections 86.200 to 86.366; 79
(7) "DROP", the deferred retirement option plan 80
provided for in section 86.251; 81
(8) "Earnable compensation", the annual salary 82
[established under section 84.160 which ] a member would earn 83
during one year on the basis of the member's rank or 84
position, plus any additional compensation for a cademic work 85
and shift differential , that [may be provided] is set by any 86 SCS HB 147 21
state or municipal body or official [or board] now or 87
hereafter authorized by law to employ and manage a permanent 88
police force in such cities. Such amount shall include the 89
member's deferrals to a deferred compensation plan pursuant 90
to Section 457 of the Internal Revenue Code or to a 91
cafeteria plan pursuant to Section 125 of the Internal 92
Revenue Code or, effective October 1, 2001, to a 93
transportation fringe benefit program pursuant to Section 94
132(f)(4) of the Internal Revenue Code. The term "earnable 95
compensation" shall not include a member's additional 96
compensation for overtime, standby time, court time, 97
nonuniform time or unused vacation time. Further, the term 98
"earnable compensation" shall not include any funds received 99
by a member through a judgment or settlement of a legal 100
action or claim made or threatened by the member against any 101
city not within a county if the funds are intended to 102
retroactively compensate the member for the salary 103
differential between the member's actual rank and the rank 104
the member claims he or she should have received. 105
Notwithstanding the foregoing, the earnable compensation 106
taken into account under the plan established pursuant to 107
sections 86.200 to 86.366 with respect to a member who is a 108
noneligible participant, as defined in this subdivision, for 109
any plan year beginning on or after October 1, 1996, shall 110
not exceed the amount of compensation that may be taken into 111
account under Section 401(a)(17) of the Internal Revenue 112
Code, as adjusted for increases in the cost of living, for 113
such plan year. For purposes of this subdivision, a 114
"noneligible participant" is an individual who first becomes 115
a member on or after the first d ay of the first plan year 116
beginning after the earlier of: 117 SCS HB 147 22
(a) The last day of the plan year that includes August 118
28, 1995; or 119
(b) December 31, 1995; 120
(9) "Internal Revenue Code", the federal Internal 121
Revenue Code of 1986, as amended; 122
(10) "Mandatory contributions", the contributions 123
required to be deducted from the salary of each member who 124
is not participating in DROP in accordance with section 125
86.320; 126
(11) "Medical board", the health care organization 127
appointed by the trustees of the police retirement board and 128
responsible for arranging and passing upon all medical 129
examinations required under the provisions of sections 130
86.200 to 86.366, which shall investigate all essential 131
statements and certificates made by or on b ehalf of a member 132
in connection with an application for disability retirement 133
and shall report in writing to the board of trustees its 134
conclusions and recommendations; 135
(12) "Member", a member of the retirement system as 136
defined by sections 86.200 to 86.366; 137
(13) "Members' interest", interest on accumulated 138
contributions at such rate as may be set from time to time 139
by the board of trustees; 140
(14) "Membership service", service as a policeman 141
rendered since last becoming a member, excep t in the case of 142
a member who has served in the Armed Forces of the United 143
States and has subsequently been reinstated as a policeman, 144
in which case "membership service" means service as a 145
policeman rendered since last becoming a member prior to 146
entering such armed service; 147 SCS HB 147 23
(15) "Plan year" or "limitation year", the twelve 148
consecutive-month period beginning each October first and 149
ending each September thirtieth; 150
(16) "Policeman" or "police officer", any member of 151
the police force of such cities who holds a rank in such 152
police force; 153
(17) "Prior service", all service as a policeman 154
rendered prior to the date the system becomes operative or 155
prior to membership service which is creditable in 156
accordance with the provisions of sectio ns 86.200 to 86.366; 157
(18) "Reserve officer", any member of the police 158
reserve force of such cities, armed or unarmed, who works 159
less than full time, without compensation, and who, by his 160
or her assigned function or as implied by his or her 161
uniform, performs duties associated with those of a police 162
officer and who currently receives a service retirement as 163
provided by sections 86.200 to 86.366; 164
(19) "Retirement allowance", annual payments for life 165
as provided by sections 86.200 to 86.366 w hich shall be 166
payable in equal monthly installments or any benefits in 167
lieu thereof granted to a member upon termination of 168
employment as a police officer and actual retirement; 169
(20) "Retirement system", the police retirement system 170
of the cities as defined in sections 86.200 to 86.366; 171
(21) "Surviving spouse", the surviving spouse of a 172
member who was the member's spouse at the time of the 173
member's death. 174
87.140. 1. The general administration and the 1
responsibility for the proper operation of the retirement 2
system shall be vested in a board of trustees of nine 3
persons. The board shall be constituted as follows: 4 SCS HB 147 24
(1) The chief of the fire department of the city, ex 5
officio; 6
(2) The comptroller or deputy c omptroller of the city, 7
ex officio; 8
(3) Two members to be appointed by the mayor of the 9
city to serve for a term of two years; 10
(4) Three members to be elected by the members of the 11
retirement system for a term of three years who shall be 12
members of the system and hold office only while members of 13
the system; 14
(5) Two members who shall be retired firemen to be 15
elected by the retired firemen of the city and who shall 16
hold office for a term of three years. 17
2. If a vacancy occurs i n the office of trustee, the 18
vacancy shall be filled for the unexpired term in the same 19
manner as the office was previously filled. 20
3. The trustees shall serve without compensation, but 21
they shall be reimbursed from the expense fund for all 22
necessary expenses which they may incur through service on 23
the board. 24
4. Each trustee shall, within ten days after his 25
appointment or election, take an oath of office before the 26
clerk of circuit court of the city, that, so far as it 27
devolves upon him, he will diligently and honestly 28
administer the affairs of the board and that he will not 29
knowingly violate or willingly permit to be violated any of 30
the provisions of the law applicable to the retirement 31
system. The oath shall be subscribed to by the member 32
making it and certified by the clerk of circuit court and 33
filed in his office. 34 SCS HB 147 25
5. Each trustee shall be entitled to one vote on the 35
board. Five votes shall be necessary for a decision by the 36
trustees at any meeting of the board. 37
6. Notwithstanding any provision of sections 87.120 to 38
87.371 to the contrary, the board of trustees of the 39
retirement system shall not be prevented from simultaneously 40
acting as the trustees of any other pension plan that 41
provides retirement, disability, and death benefits for 42
firefighters employed by any city not within a county and 43
the firefighters' covered dependents. The administration of 44
the other pension plan shall be in accordance with the terms 45
of such pension plan. Nothing in this subsectio n shall 46
prevent the board of aldermen of a city not within a county 47
from adopting ordinances to govern the pensioning of 48
firefighters and such firefighters' covered dependents in 49
any other pension plan simultaneously administered by the 50
board of trustees of the retirement system. 51
87.145. The board of trustees shall have exclusive 1
original jurisdiction in all matters relating to or 2
affecting the funds herein provided for, including, in 3
addition to all other matters, all claims for benefits and 4
refunds under this law, and its action, decision or 5
determination in any matter shall be reviewable under 6
chapter 536 only, and any party to the proceedings shall 7
have a right of appeal from the decision of the reviewing 8
court. Subject to the limitations of sections 87.120 to 9
87.370, the board of trustees shall, from time to time, 10
establish rules and regulations for the administration of 11
funds created by this law, for the transaction of its 12
business, and for the limitation of the tim e within which 13
claims may be filed. The administration of any pension plan 14
other than the retirement system includes the ability of the 15 SCS HB 147 26
board of trustees, from time to time, to establish rules and 16
regulations for the administration of funds of such ot her 17
pension plan and for the transaction of such other pension 18
plan's business. Nothing in this section shall prevent the 19
board of aldermen of a city not within a county from 20
adopting ordinances to govern the pensioning of firefighters 21
and such firefighters' covered dependents in any other 22
pension plan simultaneously administered by the board of 23
trustees of the retirement system. 24
87.155. 1. The board of trustees shall keep in 1
convenient form such data as is necessary for actuar ial 2
valuation of the funds of the retirement system and for 3
checking the experience of the system. 4
2. The board of trustees shall keep a record of all 5
its proceedings which shall be open to public inspection. 6
It shall publish annually a report s howing the fiscal 7
transactions of the retirement system for the preceding 8
fiscal year, the amount of the accumulated cash and 9
securities of the system, and the last balance sheet showing 10
the financial condition of the system by means of an 11
actuarial valuation of the assets and liabilities of the 12
retirement system. 13
3. To the extent the board of trustees administers a 14
pension plan other than the retirement system, the board of 15
trustees shall maintain separate records of all proceedings 16
of such other pension plan. 17
87.260. The board of trustees of the firefighters' 1
retirement system shall have the exclusive authority and 2
discretion to invest and reinvest the funds in property of 3
any kind, real or personal. The board of trustees shall 4
invest and manage the fund as a prudent investor would, by 5
considering the purposes, terms, distribution requirements, 6 SCS HB 147 27
and other circumstances of the firefighters' retirement 7
system. In satisfying this standard, the board of trustees 8
shall exercise reasonable care, skill, and caution. No 9
trustee shall have any interest as a trustee in the gains or 10
profits made on any investment, except benefits from 11
interest in investments common to all members of the plan, 12
if entitled thereto. To the extent the board of trustees 13
administers a pension plan other than the retirement system, 14
the board of trustees shall also have the authority and 15
discretion to invest and reinvest the funds of such other 16
pension plan in property of any kind, real or p ersonal. The 17
board of trustees may choose to invest the funds of the 18
retirement system and the funds of the other pension plan in 19
the same investments so long as the amounts invested and the 20
gains, profits, or losses on such investments are accounted 21
for separately. No benefits due to the firefighters or such 22
firefighters' covered dependents from the other pension plan 23
shall be paid from the funds of the retirement system. 24
Nothing in this section shall prevent the board of aldermen 25
of a city not within a county from adopting ordinances to 26
govern the pensioning of firefighters and such firefighters' 27
covered dependents in any other pension plan simultaneously 28
administered by the board of trustees of the retirement 29
system. 30
87.350. The expense fund shall be the fund to which 1
shall be credited all money provided to pay the 2
administration expenses of the retirement system and from 3
which shall be paid all the expenses necessary in connection 4
with the administration and operati on of the system. 5
Annually the board of trustees shall estimate the amount of 6
money necessary to be paid into the expense fund during the 7
ensuing year to provide for the expense of operation of the 8 SCS HB 147 28
retirement system. Such estimate shall be provided b y the 9
board of trustees from interest and other earnings on assets 10
of the retirement system. In no event shall any expenses, 11
including administrative expenses, incurred by the board of 12
trustees in the administration of any pension plan other 13
than the retirement system or in the investment of any funds 14
of any pension plan other than the retirement system be paid 15
from the funds of the retirement system. Such expenses 16
shall be paid entirely from the funds of the other pension 17
plan. 18
105.688. The assets of a system may be invested, 1
reinvested and managed by an investment fiduciary subject to 2
the terms, conditions and limitations provided in sections 3
105.687 to 105.689. An investment fiduciary shall discharge 4
his or her duties in the interest of the participants in the 5
system and their beneficiaries and shall: 6
(1) Act with the same care, skill, prudence, and 7
diligence under the circumstances then prevailing that a 8
prudent person acting in a similar capacity and familiar 9
with those matters would use in the conduct of a similar 10
enterprise with similar aims; 11
(2) Act with due regard for the management, 12
reputation, and stability of the issuer and the character of 13
the particular investments being considered; 14
(3) Make investments for the purposes of providing 15
benefits to participants and participants' beneficiaries, 16
and of defraying reasonable expenses of investing the assets 17
of the system; 18
(4) Give appropriate consideration to those facts and 19
circumstances that the investment fiduciary knows or should 20
know are relevant to the particular investment or investment 21
course of action involved, including the role of the 22 SCS HB 147 29
investment or investment course of action plays in that 23
portion of the system's investme nts for which the investment 24
fiduciary has responsibility. For purposes of this 25
subdivision, "appropriate consideration" shall include, but 26
is not necessarily limited to a determination by the 27
investment fiduciary that a particular investment or 28
investment course of action is reasonably designed, as part 29
of the investments of the system, to further the purposes of 30
the system, taking into consideration the risk of loss and 31
the opportunity for gain or other return associated with the 32
investment or investment course of action; and consideration 33
of the following factors as they relate to the investment or 34
investment course of action: 35
(a) The diversification of the investments of the 36
system; 37
(b) The liquidity and current return of the 38
investments of the system relative to the anticipated cash 39
flow requirements of the system; and 40
(c) The projected return of the investments of the 41
system relative to the funding objectives of the system; 42
(5) Give appropriate consideration to in vestments 43
which would enhance the general welfare of this state and 44
its citizens if those investments offer the safety and rate 45
of return comparable to other investments available to the 46
investment fiduciary at the time the investment decision is 47
made; 48
(6) Not be prohibited from closing records to the 49
extent that such records relate to information submitted by 50
an individual, corporation, or other business entity in 51
connection with investments in or financial transactions 52
with business entitie s for investment purposes; 53 SCS HB 147 30
(7) Not consider environmental, social, or governance 54
characteristics in a manner that would override his or her 55
fiduciary duties as defined in this section; 56
(8) Not be subject to any legislative, regulatory, or 57
other mandates to invest with environmentally, socially, or 58
other noneconomically motivated influence unless they are 59
consistent with the fiduciary's responsibility as provided 60
in this section or as provided in the system's governing 61
statutes with respec t to the investment of system assets or 62
other duties imposed by law relating to the investment, 63
management, deposit, or custody of system assets; and 64
(9) Not be subject to any legislative, regulatory, or 65
other mandates for divestment from any indi rect holdings in 66
actively or passively managed investment funds or in private 67
assets. 68
105.692. 1. All shares of common stock held directly 1
by a system, as defined under section 105.687, shall be 2
voted solely in the economic interes t of plan participants. 3
Voting shares for the purposes of furthering noneconomic 4
environmental, social, political, ideological, or other 5
goals is prohibited. 6
2. A system shall vote all proxies associated with its 7
directly held shares of common s tock by one of the following 8
methods: 9
(1) By internal system staff; or 10
(2) By an investment manager or proxy voting service 11
provider who has committed in writing to vote the shares 12
pursuant to proxy voting guidelines chosen by the system or 13
has committed in writing to vote the shares in a manner 14
consistent with the obligation to act solely in the economic 15
interest of plan participants. 16 SCS HB 147 31
105.693. 1. As used in this section, the following 1
terms mean: 2
(1) "Board", the governing board or decision -making 3
body of a system that is authorized by law to administer the 4
system; 5
(2) "Control": 6
(a) The same meaning as such term is defined in the 7
Investment Company Act of 1940, 15 U.S.C. Section 80a –2(a); 8
or 9
(b) Involvement in an entity's governance structure, 10
monitoring, or internal human resources decisions consistent 11
with the objectives set out in the Opinion on Strengthening 12
the United Front Work of the Private Economy in the New Era 13
issued by the General Office of the Central Committee of the 14
Chinese Communist Party (2020) or a successor or similar 15
document; 16
(3) "Divest", a sale, redemption, replacement, or any 17
other activity that terminates an investment; 18
(4) "Fund", the retirement b enefit fund of a system; 19
(5) "Investment", any investment, as such term is 20
defined in section 105.687, that the board or system is 21
authorized to make; 22
(6) "Person", an individual or entity; 23
(7) "Restricted entity", the following, includ ing 24
wholly-owned subsidiaries, majority -owned subsidiaries, 25
parent companies, and affiliates that exist for profit - 26
making purposes: 27
(a) Any person, other than a U.S. person, as the term 28
"U.S. person" is defined in 15 CFR 772.1, that is identified 29
for the People's Republic of China on the Entity List, 30
Supplement No. 4 to 15 CFR Part 744, as a person reasonably 31
believed to be involved, or to pose a significant risk of 32 SCS HB 147 32
being or becoming involved, in activities contrary to the 33
national security or foreign policy interests of the United 34
States until the End -User Review Committee of the Bureau of 35
Industry and Security in the United States Department of 36
Commerce determines that the person no longer meets that 37
criteria and removes the person from the list; 38
(b) Any person that: 39
a. The United States Secretary of Defense has listed 40
as a Communist Chinese military company operating directly 41
or indirectly in the United States or in any of its 42
territories or possessions under Section 1237 of the Strom 43
Thurmond National Defense Authorization Act of Fiscal Year 44
1999, P.L. 105-261, as amended by Section 1233 of P.L. 106 - 45
398 and Section 1222 of P.L. 108 -375, 50 U.S.C. Section 1701 46
note, until such time as the United States Secretary of 47
Defense removes the person from such list; 48
b. The United States Secretary of Defense, in 49
consultation with the United States Secretary of the 50
Treasury, determines is a Communist Chinese military company 51
operating directly or indirectly in the United States or in 52
any of its territories or possessions and therefore lists as 53
such under Section 1237 of the Strom Thurmond National 54
Defense Authorization Act of Fiscal Year 1999, P.L. 105 -261, 55
as amended by Section 1233 of P.L. 106 -398 and Section 1222 56
of P.L. 108-375, 50 U.S.C. Section 1701 note, until such 57
time as the United States Secretary of Defense removes the 58
person from such list; or 59
c. The United States Secretary of the Treasury 60
publicly lists as meeting the criteria in Section 61
1237(b)(4)(B) of the Strom Thurmond National Defense 62
Authorization Act of Fiscal Year 1999, P.L. 105 -261, as 63
amended by Section 1222 of P.L. 108 -375, 50 U.S.C. Section 64 SCS HB 147 33
1701 note, or publicly lists as a subsidiary of a person 65
already determined to be a Communis t Chinese military 66
company, until the United States Secretary of the Treasury 67
determines that the person no longer meets that criteria and 68
removes the person from such list; 69
(c) Any organization or citizen that is identified by 70
the appropriate government agencies to be required by the 71
National Intelligence Law of the People's Republic of China 72
(2017), as amended in 2018, or any successor to support, 73
assist, and cooperate with the state intelligence work of 74
the People's Republic of China and ke ep the secrets of the 75
national intelligence work of the People's Republic of 76
China; or 77
(d) Any person that is listed on the Specially 78
Designated Nationals and Blocked Persons List published by 79
the Office of Foreign Assets Control of United States 80
Department of the Treasury; 81
(8) "Restricted investment product", an investment 82
product that: 83
(a) Is managed by one or more persons: 84
a. That are not employed by the system; and 85
b. In which the system on behalf of the fund owns 86
investments together with investors other than the system; 87
and 88
(b) Holds investments in a restricted entity; 89
(9) "System", any state or local public retirement 90
system or plan established by the state or any political 91
subdivision or instrumenta lity of the state for the purpose 92
of providing plan benefits for elected or appointed public 93
officials or employees of the state or any political 94
subdivision or instrumentality of the state. 95 SCS HB 147 34
2. After August 28, 2025, a system shall not knowingly 96
invest in a restricted entity or a restricted investment 97
product and shall divest any investment that the system has 98
on behalf of a fund in accordance with this section. 99
3. Before December 1, 2025, and at least annually on 100
or before December first of each subsequent year, the board 101
shall make a good faith effort to identify all restricted 102
entities and restricted investment products in which the 103
system holds an investment. The board may use an 104
independent research firm to assist the board. 105
4. (1) If the board determines after a review under 106
subsection 3 of this section that the system has investments 107
in a restricted entity or a restricted investment product, 108
the board shall establish a plan to divest the investment 109
and complete the divestment as soon as financially prudent. 110
Except as provided in subdivision (2) of this subsection, 111
the investment shall be divested no later than August 28, 112
2026. 113
(2) The investment may be divested after August 28, 114
2026, but shall be divested no later than August 28, 2028, 115
if the board finds that the following conditions exist: 116
(a) The divestment of the investment by August 28, 117
2026, would result in the system incurring aggregate 118
transaction costs in excess of five hundred thousand dolla rs; 119
(b) The selling of global public equity interests 120
would result in a loss on secondary markets; or 121
(c) The divestment of the investment by August 28, 122
2026, would otherwise fail to comply with federal or state 123
law or other legal obligation s. 124
5. Prior to divesting any commingled fund required by 125
this section in which the divestment would result in a 126
realized loss, the staff of the system shall notify the 127 SCS HB 147 35
board and if, within two business days, a majority of the 128
trustees of the boar d object, no further action shall be 129
taken until a special or regular meeting of the board. 130
6. The board shall determine whether to cease or defer 131
divestment in the entity or product initiated under this 132
section and resume investment in the entity or product 133
during any period in which the entity or product has not 134
returned to being a restricted entity or restricted 135
investment product if any of the following conditions are 136
met: 137
(1) The entity or product meets or exceeds the rules 138
and standards of the Public Company Accounting Oversight 139
Board and the Sarbanes -Oxley Act of 2002, P.L. 107 -204, 116 140
Stat. 745; or 141
(2) The board determines that a fund has holdings in a 142
passively managed commingled fund that includes a restricted 143
entity and the estimated cost of divestment of the 144
commingled fund is greater than ten percent of the total 145
value of the restricted entities held in the commingled fund. 146
7. (1) On or before December 31, 2025, and annually 147
on or before December thirty -first of each subsequent year, 148
the board shall submit a report to the general assembly. 149
(2) The report shall include at least the following 150
information, as of the date of the report: 151
(a) A copy of the restricted entity list; 152
(b) All publicly traded securities sold, redeemed, 153
divested, or withdrawn in compliance with this section; 154
(c) All commingled funds that are exempted from 155
divestment under subsection 5 or 6 of this section; and 156
(d) Any progress made under subsection 6 of this 157
section. 158 SCS HB 147 36
8. With respect to actions taken in compliance with 159
this section, including all good faith determinations 160
regarding restricted entities and restricted investment 161
products, the board and the system are exempt from any 162
conflicting statutory or common law obligations, including 163
any obligations with respect to choice of asset managers, 164
investment fiduciaries, investment funds, or investments for 165
fund investment portfolios. 166
9. The state and any political subdivision of the 167
state; its officers, agents, and employees; and the board 168
and employees of a system shall be immune from civil 169
liability for any act or omission related to the removal of 170
an asset from a fund under this section and are entitled to 171
indemnification from the system for all losses, costs, and 172
expenses, including reasonable attorney's fees, associated 173
with defending against any claim or suit relating to an act 174
authorized under this section. 175
10. (1) Notwithstanding any provision of law to the 176
contrary, the provisions of this section do not apply to 177
investments in private market funds. 178
(2) Notwithstanding any provision of law to the 179
contrary, the provisions of this section do not apply to 180
indirect holdings in actively managed investment funds. 181
(3) If a manager or investment fiduciary creates a 182
similar actively managed investment fund without the 183
restricted entities, the board shall replace all applicable 184
investments with the investments in the similar actively 185
managed investment fund wi thin a period consistent with 186
prudent investing standards. 187
143.124. 1. Other provisions of law to the contrary 1
notwithstanding, for tax years ending on or before December 2
31, 2006, the total amount of all annuities, pensions, or 3 SCS HB 147 37
retirement allowances above the amount of six thousand 4
dollars annually provided by any law of this state, the 5
United States, or any other state to any person except as 6
provided in subsection 4 of this section, shall be subject 7
to tax pursuant to the pro visions of this chapter, in the 8
same manner, to the same extent and under the same 9
conditions as any other taxable income received by the 10
person receiving it. For purposes of this section, 11
"annuity, pension, retirement benefit, or retirement 12
allowance" shall be defined as an annuity, pension or 13
retirement allowance provided by the United States, this 14
state, any other state or any political subdivision or 15
agency or institution of this or any other state. For all 16
tax years beginning on or after Jan uary 1, 1998, for 17
purposes of this section, annuity, pension or retirement 18
allowance shall be defined to include 401(k) plans, deferred 19
compensation plans, self -employed retirement plans, also 20
known as Keogh plans, annuities from a defined pension plan 21
and individual retirement arrangements, also known as IRAs, 22
as described in the Internal Revenue Code, but not including 23
Roth IRAs, as well as an annuity, pension or retirement 24
allowance provided by the United States, this state, any 25
other state or any political subdivision or agency or 26
institution of this or any other state. An individual 27
taxpayer shall only be allowed a maximum deduction equal to 28
the amounts provided under this section for each taxpayer on 29
the combined return. 30
2. For the period beginning July 1, 1989, and ending 31
December 31, 1989, there shall be subtracted from Missouri 32
adjusted gross income for that period, determined pursuant 33
to section 143.121, the first three thousand dollars of 34
retirement benefits received by each taxpayer: 35 SCS HB 147 38
(1) If the taxpayer's filing status is single, head of 36
household or qualifying widow(er) and the taxpayer's 37
Missouri adjusted gross income is less than twelve thousand 38
five hundred dollars; or 39
(2) If the taxpayer's filing status i s married filing 40
combined and their combined Missouri adjusted gross income 41
is less than sixteen thousand dollars; or 42
(3) If the taxpayer's filing status is married filing 43
separately and the taxpayer's Missouri adjusted gross income 44
is less than eight thousand dollars. 45
3. [For the tax years beginning on or after January 1, 46
1990, but ending on or before December 31, 2006, ] There 47
shall be subtracted from Missouri adjusted gross income, 48
determined pursuant to section 143.121, [a maximum of the 49
first six thousand dollars of retirement benefits received 50
by each taxpayer from sources other than privately funded 51
sources, and for tax years beginning on or after January 1, 52
1998, there shall be subtracted from Missouri adjusted gross 53
income, determined pursuant to section 143.121, a maximum of 54
the first one thousand dollars of any retirement allowance 55
received from any privately funded source for tax years 56
beginning on or after January 1, 1998, but before January 1, 57
1999, and a maximum of th e first three thousand dollars of 58
any retirement allowance received from any privately funded 59
source for tax years beginning on or after January 1, 1999, 60
but before January 1, 2000, and a maximum of the first four 61
thousand dollars of any retirement all owance received from 62
any privately funded source for tax years beginning on or 63
after January 1, 2000, but before January 1, 2001, and a 64
maximum of the first five thousand dollars of any retirement 65
allowance received from any privately funded source for tax 66
years beginning on or after January 1, 2001, but before 67 SCS HB 147 39
January 1, 2002, and ] a maximum of the first six thousand 68
dollars of any retirement allowance received by each 69
taxpayer from any privately funded sources for tax years 70
beginning on or after January 1, 2002, but before January 1, 71
2026, and a maximum of the first twelve thousand dollars of 72
any retirement allowance received from any privately funded 73
sources for tax years beginning on or after January 1, 74
2026. A taxpayer shall be entitled to the maximum exemption 75
provided by this subsection: 76
(1) If the taxpayer's filing status is single, head of 77
household or qualifying widow(er) and the taxpayer's 78
Missouri adjusted gross income is less than twenty -five 79
thousand dollars for all tax years ending on or before 80
December 31, 2025, and less than fifty thousand dollars for 81
all tax years beginning on or after January 1, 2026 ; or 82
(2) If the taxpayer's filing status is married filing 83
combined and their combined Missouri adjusted gross income 84
is less than thirty-two thousand dollars for all tax years 85
ending on or before December 31, 2025, and less than sixty - 86
four thousand dollars for all tax years beginning on or 87
after January 1, 2026 ; or 88
(3) If the taxpayer's filing status is married filing 89
separately and the taxpayer's Missouri adjusted gross income 90
is less than sixteen thousand dollars for all tax years 91
ending on or before December 31, 2025, and less than thirty - 92
two thousand six hundred dollars for all tax years beginning 93
on or after January 1, 2026 . 94
4. If a taxpayer's adjusted gross income exceeds the 95
adjusted gross income ceiling for such taxpayer's filing 96
status, as provided in subdivisions (1), (2) and (3) of 97
subsection 3 of this section, such taxpayer shall be 98
entitled to an exemption equal to the greater of zero or the 99 SCS HB 147 40
maximum exemption provided in subsection 3 of this section 100
reduced by one dollar for every dollar such taxpayer's 101
income exceeds the ceiling for his or her filing status. 102
5. For purposes of this subsection, the term "maximum 103
Social Security benefit available" shall mean thirty -two 104
thousand five hundred dollars for the tax year beginning on 105
or after January 1, 2007, and for each subsequent tax year 106
such amount shall be increased by the percentage increase in 107
the Consumer Price Index for All Urban Consumers, or its 108
successor index, as such index is defined and officially 109
reported by the United States Department of Labor, or its 110
successor agency. For the tax year beginning on or after 111
January 1, 2007, but ending on or before December 31, 2007, 112
there shall be subtracted from Missouri adjusted gross 113
income, determined pursuant to section 143.121, a maximum of 114
an amount equal to the greater of: six thousand dollars in 115
retirement benefits received from sources other than 116
privately funded sources, to the extent such benefits are 117
included in the taxpayer's federal adjusted gross income; or 118
twenty percent of the retirement benefits received from 119
sources other than privately fund ed sources in the tax year, 120
but not to exceed the maximum Social Security benefit 121
available for such tax year. For the tax year beginning on 122
or after January 1, 2008, but ending on or before December 123
31, 2008, there shall be subtracted from Missouri a djusted 124
gross income, determined pursuant to section 143.121, a 125
maximum of an amount equal to the greater of: six thousand 126
dollars in retirement benefits received from sources other 127
than privately funded sources, to the extent such benefits 128
are included in the taxpayer's federal adjusted gross 129
income; or thirty-five percent of the retirement benefits 130
received from sources other than privately funded sources in 131 SCS HB 147 41
the tax year, but not to exceed the maximum Social Security 132
benefit available for such t ax year. For the tax year 133
beginning on or after January 1, 2009, but ending on or 134
before December 31, 2009, there shall be subtracted from 135
Missouri adjusted gross income, determined pursuant to 136
section 143.121, a maximum of an amount equal to the grea ter 137
of: six thousand dollars in retirement benefits received 138
from sources other than privately funded sources, to the 139
extent such benefits are included in the taxpayer's federal 140
adjusted gross income; or fifty percent of the retirement 141
benefits received from sources other than privately funded 142
sources in the tax year, but not to exceed the maximum 143
Social Security benefit available for such tax year. For 144
the tax year beginning on or after January 1, 2010, but 145
ending on or before December 31, 2010, there shall be 146
subtracted from Missouri adjusted gross income, determined 147
pursuant to section 143.121, a maximum of an amount equal to 148
the greater of: six thousand dollars in retirement benefits 149
received from sources other than privately funded sourc es, 150
to the extent such benefits are included in the taxpayer's 151
federal adjusted gross income; or sixty -five percent of the 152
retirement benefits received from sources other than 153
privately funded sources in the tax year, but not to exceed 154
the maximum Social Security benefit available for such tax 155
year. For the tax year beginning on or after January 1, 156
2011, but ending on or before December 31, 2011, there shall 157
be subtracted from Missouri adjusted gross income, 158
determined pursuant to section 143.121, a maximum of an 159
amount equal to the greater of: six thousand dollars in 160
retirement benefits received from sources other than 161
privately funded sources, to the extent such benefits are 162
included in the taxpayer's federal adjusted gross income; or 163 SCS HB 147 42
eighty percent of the retirement benefits received from 164
sources other than privately funded sources in the tax year, 165
but not to exceed the maximum Social Security benefit 166
available for such tax year. For all tax years beginning on 167
or after January 1, 2012, there shall be subtracted from 168
Missouri adjusted gross income, determined pursuant to 169
section 143.121, a maximum of an amount equal to one hundred 170
percent of the retirement benefits received from sources 171
other than privately funded sources in the tax year, but not 172
to exceed the maximum Social Security benefit available for 173
such tax year. For all tax years beginning on or before 174
December 31, 2023, a taxpayer shall be entitled to the 175
maximum exemption provided by this subsection: 176
(1) If the taxpayer's filing status is married filing 177
combined, and their combined Missouri adjusted gross income 178
is equal to or less than one hundred thousand dollars; or 179
(2) If the taxpayer's filing status is single, head of 180
household, qualifying widow(er), or married filing 181
separately, and the taxpayer's Missouri adjusted gross 182
income is equal to or less than eighty -five thousand dollars. 183
For all tax years beginning on or after January 1, 2024, a 184
taxpayer shall be entitled to the maximum exemption provide d 185
by this subsection regardless of the taxpayer's filing 186
status or the amount of the taxpayer's Missouri adjusted 187
gross income. 188
6. For all tax years beginning on or before December 189
31, 2023, if a taxpayer's adjusted gross income exceeds the 190
adjusted gross income ceiling for such taxpayer's filing 191
status, as provided in subdivisions (1) and (2) of 192
subsection 5 of this section, such taxpayer shall be 193
entitled to an exemption, less any applicable reduction 194 SCS HB 147 43
provided under subsection 7 of this sec tion, equal to the 195
greater of zero or the maximum exemption provided in 196
subsection 5 of this section reduced by one dollar for every 197
dollar such taxpayer's income exceeds the ceiling for his or 198
her filing status. 199
7. For purposes of calculating th e subtraction 200
provided in subsection 5 of this section, such subtraction 201
shall be decreased by an amount equal to any Social Security 202
benefit exemption provided under section 143.125. 203
8. For purposes of this section, any Social Security 204
benefits otherwise included in Missouri adjusted gross 205
income shall be subtracted; but Social Security benefits 206
shall not be subtracted for purposes of other computations 207
pursuant to this chapter, and are not to be considered as 208
retirement benefits for purposes of this section. 209
9. The provisions of subdivisions (1) and (2) of 210
subsection 3 of this section shall apply during all tax 211
years in which the federal Internal Revenue Code provides 212
exemption levels for calculation of the taxability of Social 213
Security benefits that are the same as the levels in 214
subdivisions (1) and (2) of subsection 3 of this section. 215
If the exemption levels for the calculation of the 216
taxability of Social Security benefits are adjusted by 217
applicable federal law or regulation, the exemption levels 218
in subdivisions (1) and (2) of subsection 3 of this section 219
shall be accordingly adjusted to the same exemption levels. 220
10. The portion of a taxpayer's lump sum distribution 221
from an annuity or other retirement plan not otherwi se 222
included in Missouri adjusted gross income as calculated 223
pursuant to this chapter but subject to taxation under 224
Internal Revenue Code Section 402 shall be taxed in an 225 SCS HB 147 44
amount equal to ten percent of the taxpayer's federal 226
liability on such distribut ion for the same tax year. 227
11. For purposes of this section, retirement benefits 228
received shall not include any withdrawals from qualified 229
retirement plans which are subsequently rolled over into 230
another retirement plan. 231
12. The exemptions provided for in this section shall 232
not affect the calculation of the income to be used to 233
determine the property tax credit provided in sections 234
135.010 to 135.035. 235
13. The exemptions provided for in this section shall 236
apply to any annuity, pensio n, or retirement allowance as 237
defined in subsection 1 of this section to the extent that 238
such amounts are included in the taxpayer's federal adjusted 239
gross income and not otherwise deducted from the taxpayer's 240
federal adjusted gross income in the calcu lation of Missouri 241
taxable income. This subsection shall not apply to any 242
individual who qualifies under federal guidelines to be one 243
hundred percent disabled. 244
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