1793S.02C
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SENATE COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 514
AN ACT
To repeal sections 70.630, 70.655, 70.680, 70.690,
70.745, 70.746, 70.747, and 105.688, RSMo, and to
enact in lieu thereof nine new sections relating to
public employee retirement systems.
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,
70.745, 70.746, 70.747, and 105.688, RSMo, are repealed and
nine new sections enacted in lieu thereof, to be known as
sections 70.630, 70.655, 70.680, 70.690, 70.745, 70.746,
70.747, 70.748, and 105 .688, to read as follows:
70.630. 1. The membership of the system shall include
the following persons:
(1) All employees who are neither policemen nor
firemen who are in the employ of a political subdivision the
day preceding the date such political subdivision becomes an
employer and who continue in such employ on and after such
date shall become members of the system.
(2) All persons who become employed by a political
subdivision as neither policemen nor firemen on or after the
date such political subdivision becomes an employer shall
become members of the system.
(3) If his employing political subdivision has elected
to cover present and future policemen, all policemen who are
in the employ of a political subdivision th e day preceding
the date such political subdivision covers policemen
hereunder and who continue in such employ as a policeman on
and after such date, and all persons who become employed by
a political subdivision as a policeman on or after the date
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the political subdivision covers policemen shall become
members of the system.
(4) If his employing political subdivision has elected
to cover only future policemen, all persons who become
employed by a political subdivision as a policeman on or
after the date such political subdivision covers policemen
hereunder shall become members of the system.
(5) If his employing political subdivision has elected
to cover present and future firemen, all firemen who are in
the employ of a political sub division the day preceding the
date such political subdivision covers firemen hereunder and
who continue in such employ as a fireman on and after such
date, and all persons who become employed by a political
subdivision as a fireman on or after the dat e the political
subdivision covers firemen hereunder shall become members of
the system.
(6) If his employing political subdivision has elected
to cover only future firemen, all persons who become
employed by a political subdivision as a fireman on or after
the date such political subdivision covers firemen hereunder
shall become members of the system.
2. [In no event shall an employee become a member if
continuous employment to time of retirement will leave the
employee with less than m inimum number of years of credited
service specified in section 70.645.
3.] In any case of question as to the system
membership status of any person, the board shall decide the
question.
70.655. 1. Upon a member's retirement he o r she shall
receive an allowance for life in accordance with the
applicable benefit program elected by the member's employer,
as follows:
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(1) Benefit program L-1. A member with credited
service covered by benefit program L -1 shall receive an
allowance for life equal to one percent of the member's
final average salary multiplied by the number of years of
such credited service;
(2) Benefit program L-3. A member with credited
service covered by benefit program L -3 shall receive an
allowance for life equal to one and one -quarter percent of
the member's final average salary multiplied by the number
of years of such credited service;
(3) Benefit program LT-4. A member with credited
service covered by benefit program LT -4 shall receive an
allowance for life equal to one percent of the member's
final average salary multiplied by the number of years of
such credited service. In addition, if such member is
retiring as provided in section 70.645 or section 70.650 or
section 70.670, and if such member's age at retirement is
younger than age sixty -two, then such member shall receive a
temporary allowance equal to one percent of the member's
final average salary multiplied by the number of years of
such credited service. Such temporary allowance shall
terminate at the end of the calendar month in which the
earlier of the following events occurs: such member's
death; or the member's attainment of age sixty -two;
(4) Benefit program LT-5. A member with credited
service covered by benefit program LT -5 shall receive an
allowance for life equal to one and one -quarter percent of
the member's final average salary multiplied by the number
of years of such credited service. In addition, if such
member is retiring as provided in section 70.645 or section
70.650 or section 70.670, and if such member's age at
retirement is younger than age sixty -two, then such member
shall receive a temporary allowance equal to three -quarters
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of one percent of the member's final average salar y
multiplied by the number of years of such credited service.
Such temporary allowance shall terminate at the end of the
calendar month in which the earlier of the following events
occurs: such member's death; or the member's attainment of
age sixty-two;
(5) Benefit program L-6. A member with credited
service covered by benefit program L -6 shall receive an
allowance for life equal to two percent of the member's
final average salary multiplied by the number of years of
such credited service;
(6) Benefit program L-7. A member with credited
service covered by benefit program L -7 shall receive an
allowance for life equal to one and one -half percent of the
member's final average salary multiplied by the number of
years of such credited service;
(7) Benefit program LT-8. A member with credited
service covered by benefit program LT -8 shall receive an
allowance for life equal to one and one -half percent of the
member's final average salary multiplied by the number of
years of such credited service. In addition, if such member
is retiring as provided in section 70.645 or section 70.650
or section 70.670, and if such member's age at retirement is
younger than age sixty -two, then such member shall receive a
temporary allowance equal to one-half of one percent of the
member's final average salary multiplied by the number of
years of such credited service. Such temporary allowance
shall terminate at the end of the calendar month in which
the earlier of the following events oc curs: such member's
death; or the member's attainment of age sixty -two;
(8) Benefit program LT-4(65). A member with credited
service covered by benefit program LT -4(65) shall receive an
allowance for life equal to one percent of the member's
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final average salary multiplied by the number of years of
such credited service. In addition, if such member is
retiring as provided in section 70.645 or section 70.650 or
section 70.670, and if such member's age at retirement is
younger than age sixty -five, then such member shall receive
a temporary allowance equal to one percent of the member's
final average salary multiplied by the number of years of
such credited service. Such temporary allowance shall
terminate at the end of the calendar month in which the
earlier of the following events occurs: such member's death;
or the member's attainment of age sixty -five;
(9) Benefit program LT-5(65). A member with credited
service covered by benefit program LT -5(65) shall receive an
allowance for life equal to one and one -quarter percent of
the member's final average salary multiplied by the number
of years of such credited service. In addition, if such
member is retiring as provided in section 70.645 or section
70.650 or section 70.670, an d if such member's age at
retirement is younger than age sixty -five, then such member
shall receive a temporary allowance equal to three -quarters
of one percent of the member's final average salary
multiplied by the number of years of such credited ser vice.
Such temporary allowance shall terminate at the end of the
calendar month in which the earlier of the following events
occurs: such member's death; or the member's attainment of
age sixty-five;
(10) Benefit program LT-8(65). A member with credited
service covered by benefit program LT -8(65) shall receive an
allowance for life equal to one and one -half percent of the
member's final average salary multiplied by the number of
years of such credited service. In addition, if such member
is retiring as provided in section 70.645 or section 70.650
or section 70.670, and if such member's age at retirement is
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younger than age sixty -five, then such member shall receive
a temporary allowance equal to one -half of one percent of
the member's final average salary multiplied by the number
of years of such credited service. Such temporary allowance
shall terminate at the end of the calendar month in which
the earlier of the following events occurs: such member's
death; or the member's attainm ent of age sixty-five;
(11) Benefit program L-9. A member with credited
service covered by benefit program L -9 shall receive an
allowance for life equal to one and six -tenths percent of
the member's final average salary multiplied by the number
of years of such credited service;
(12) Benefit program LT-10(65). A member with
credited service covered by benefit program LT -10(65) shall
receive an allowance for life equal to one and six -tenths
percent of the members' final average salary mu ltiplied by
the number of years of such credited service. In addition,
if such member is retiring as provided in section 70.645 or
section 70.650 or section 70.670, and if such member's age
at retirement is younger than age sixty -five, then such
member shall receive a temporary allowance equal to four -
tenths of one percent of the member's final average salary
multiplied by the number of years of such credited service.
Such temporary allowance shall terminate at the end of the
calendar month in wh ich the earlier of the following events
occurs: such member's death; or the member's attainment of
age sixty-five;
(13) Benefit program L-11. Benefit program L-11 may
cover employment in a position only if such position is not
concurrently covered by federal Social Security; in
addition, if such position was previously covered by federal
Social Security, benefit program L -11 may cover only
employment rendered after cessation of federal Social
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Security coverage. A member with credited service covered
by benefit program L -11 shall receive an allowance for life
equal to two and one -half percent of the member's final
average salary multiplied by the number of years of such
credited service;
(14) Benefit program L-12. A member with credited
service covered by benefit program L -12 shall receive an
allowance for life equal to one and three -quarter percent of
the member's final average salary multiplied by the number
of years of such credited service;
(15) Benefit program LT-14(65). A member with
credited service covered by benefit program LT -14(65) shall
receive an allowance for life equal to one and three -quarter
percent of the member's final average salary multiplied by
the number of years of such credited service. In addition,
if such member is retiring as provided in section 70.645,
70.650, or 70.670, then such member shall receive a
temporary allowance equal to one -quarter of one percent of
the member's final average salary multiplied by the number
of years of such credited service. Such temporary allowance
shall terminate at the end of the calendar month in which
the earlier of the following events occurs: such member's
death or the member's attainment of age sixty -five.
2. If each portion of a member's c redited service is
not covered by the same benefit program, then the member's
total allowance for life shall be the total of the allowance
for life determined under each applicable benefit program.
3. Each employer shall have the credited service of
each of its members covered by benefit program L -1 provided
for in this section unless such employer shall have elected
another benefit program provided for in this section.
4. Except as otherwise provided in this subsection,
each political subdivision, by majority vote of its
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governing body, may elect from time to time to cover its
members, whose political subdivision employment is
concurrently covered by federal Social Security, under one
of the benefit programs provided for in this secti on. Each
political subdivision, by majority vote of its governing
body, may elect from time to time to cover its members,
whose political subdivision employment is not concurrently
covered by federal Social Security, under one of the benefit
programs provided for in this section. The clerk or
secretary of the political subdivision shall certify the
election of the benefit program to the board within ten days
after such vote. The effective date of the political
subdivision's benefit program is th e first day of the
calendar month specified by such governing body, or the
first day of the calendar month next following receipt by
the board of the certification of election of benefit
program, or the effective date of the political subdivision
becoming an employer, whichever is the latest. Such
election of benefit program may be changed from time to time
by such vote, but not more often than biennially. If such
changed benefit program provides larger allowances than the
benefit program previou sly in effect, then such larger
benefit program shall be applicable to the past and future
employment with the employer by present and future
employees. If such changed benefit program provides smaller
allowances than the benefit program previously in effect,
then such changed benefit program shall be applicable only
to credited service for employment rendered from and after
the effective date of such change. After August 28, 1994,
political subdivisions shall not elect coverage under
benefit program LT-4, benefit program LT -5, or benefit
program LT-8. After August 28, 2005, political subdivisions
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shall not elect coverage under benefit program L -9 or
benefit program LT-10(65).
5. Should an employer change its election of benefit
program as provided in this section, the employer
contributions shall be correspondingly changed effective the
same date as the benefit program change.
6. The limitation on increases in an employer's
contribution provided by subsection 6 of section 70.73 0
shall not apply to any contribution increase resulting from
an employer electing a benefit program which provides larger
allowances.
7. Subject to the provisions of subsections 8 and 9
[and 10] of this section, for an allowance becoming
effective on September 28, 1975, or later, and beginning
with the October first which is at least twelve full months
after the effective date of the allowance, the amount of the
allowance shall be redetermined effective each October first
and such redetermined amount shall be payable for the
ensuing year. Subject to the limitations stated in the next
sentence, such redetermined amount shall be the amount of
the allowance otherwise payable multiplied by the following
percent: one hundred percent, plus tw o percent for each
full year (excluding any fraction of a year) in the period
from the effective date of the allowance to the current
October first. In no event shall such redetermined amount
(1) be less than the amount of the allowance otherwise
payable nor (2) be more than the amount of the allowance
otherwise payable multiplied by the following fraction: the
numerator shall be the Consumer Price Index for the month of
June immediately preceding such October first (but in no
event an amount less than the denominator below) and the
denominator shall be the Consumer Price Index for the month
of June immediately preceding the effective date of the
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allowance. As used herein, "Consumer Price Index" means a
measure of the Consumer Price Index [for Urban Wage Earners
and Clerical Workers, ] as determined by the United States
Department of Labor and adopted by the board of trustees [in
effect January 1, 1975; provided, should such Consumer Price
Index be restructured subsequent to 1974 in a manne r
materially changing its character, the board shall change
the application of the Consumer Price Index so that as far
as is practicable the 1975 intent of the use of the Consumer
Price Index shall be continued ]. As used herein "the amount
of the allowance otherwise payable" means the amount of the
allowance which would be payable without regard to these
provisions redetermining allowance amounts after retirement.
8. [Subject to the provisions of subsections 9 and 10
of this section, for an a llowance becoming effective on
September 28, 1975, or later, the maximum allowance payable
under the provisions of section 70.685 shall be redetermined
each October first in the same manner as an allowance is
redetermined under the provisions of subsec tion 7 of this
section.
9.] (1) The system establishes reserves for the
payment of future allowances to retirants and
beneficiaries. Should the board determine, after consulting
with the actuary, that the established reserves are more
than sufficient to provide such allowances, the board may
increase the annual increase rate provided for in
[subsections] subsection 7 [and 8] of this section, as it
applies to any allowance payable, but in no event shall the
total of all redetermined amounts as of October first of any
year be greater than one hundred four percent of the
allowances which would have been payable that October first
without such redeterminations; provided, as of any
redetermination date the same annual increase rate shall be
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applied to all allowances with effective dates in the range
of November first to October first of the following year.
The board may extend the provisions of [subsections]
subsection 7 [and 8] of this section to allowances which
became effective before September 28, 1975; provided such an
action by the board shall not increase an employer
contribution rate then in effect;
(2) After August 28, 1993, the annual increase rate
established by this subsection shall be a compound rate,
compounded annually, and the four percent annual maximum
rate shall also be a compound rate, compounded annually;
provided, the use of such compounding shall not begin until
October 1, 1993, and shall not affect redeterminations made
prior to that date.
[10.] 9. Should the board determine that the
provisions of subsections 7 [, 8] and [9] 8 of this section
are jeopardizing the financial solvency of the system, the
board shall suspend these provisions redetermining allowance
amounts after retirement for such periods of time as the
board deems appropriate.
70.680. 1. Any member in service with five or more
years of credited service who has not attained the age and
service requirements of section 70.645 and who becomes
totally and permanent ly physically or mentally incapacitated
for his duty as an employee, as the result of a personal
injury or disease, may be retired by the board upon written
application filed with the board by or on behalf of the
member; provided, that after a medical examination of such
member made by or under the direction of a medical committee
consisting of three physicians, one of whom shall be
selected by the board, one by or on behalf of such member,
and the third by the first two physicians so named, the
medical committee reports to the board, by majority opinion
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in writing, that such member is physically or mentally
totally incapacitated for the further performance of duty,
that such incapacity will probably be permanent and that
such member should be r etired.
2. Upon disability retirement, as provided in
subsection 1 of this section, a member shall receive an
allowance for life provided for in section 70.655 and shall
have the right to elect an option provided for in section
70.660. His or her disability retirement and allowance
shall be subject to the provisions of subsection 5 of this
section [and to the provisions of section 70.685 ].
3. Any member in service who becomes totally and
permanently physically or mentally incapacitated f or his
duty as an employee, as the natural and proximate result of
a personal injury or disease which the board finds to have
arisen out of and in the course of his actual performance of
duty as an employee, may be retired by the board upon
written application filed with the board by or on behalf of
the member; provided, that after a medical examination of
such member made by or under the direction of a medical
committee consisting of three physicians, one of whom shall
be selected by the board, on e by or on behalf of such
member, and the third by the first two physicians so named,
the medical committee reports to the board, by majority
opinion in writing, that such member is physically or
mentally totally incapacitated for the further performan ce
of duty, that such incapacity will probably be permanent,
and that such member should be retired.
4. Upon disability retirement as provided in
subsection 3 of this section, a member shall receive an
allowance for life provided for in section 7 0.655; provided,
that for the sole purpose of computing the amount of such
allowance, he or she shall be given credited service for the
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period from the date of his or her disability retirement to
the date he or she would attain age sixty. He or she shall
have the right to elect an option provided for in section
70.660. His or her disability retirement and allowance
shall be subject to the provisions of subsection 5 of this
section [and to the provisions of section 70.685 ].
5. At least once each year during the first five years
following a member's retirement on account of disability,
and at least once in each three -year period thereafter, the
board shall require any disability retirant who has not
attained his minimum service retirement a ge to undergo a
medical examination to be made by a physician designated by
the board. If the retirant refuses to submit to medical
examination in any such period, his disability allowance
shall be suspended by the board until his withdrawal of such
refusal. If such refusal continues for one year, all his
rights in and to a disability allowance shall be revoked by
the board. If, upon medical examination of the retirant,
the physician reports to the board that the retirant is
physically and menta lly able and capable of resuming his
duty as an employee in the position held by him at the time
of his disability retirement, then the board shall, if
demanded by the retirant, arrange a further medical
examination of such member made by or under the direction of
a medical committee consisting of three physicians, one of
whom shall be selected by the board, one by or on behalf of
the member, and the third by the first two physicians
named. Should the medical committee concur, by majority
opinion in writing to the board, the disability retirant is
capable of resumption of duty, his disability retirement
shall terminate and he shall be returned to duty and he
shall immediately again become a member of the system, his
credited service at the time of disability retirement shall
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be restored to his credit, and the amount of his accumulated
contributions at the time of his disability retirement shall
be restored to his credit in the members deposit fund. If
he was in receipt of a duty disability allowance provided
for in subsection 3 of this section, he shall also be given
service credit for the period he was in receipt of the duty
disability allowance.
70.690. 1. In the event a member ceases to be a
member other than by deat h before the date he becomes
entitled to retire with an allowance payable by the system,
he shall be paid, upon his written application filed with
the board, his accumulated contributions standing to his
credit in the members deposit fund.
2. In the event a member dies, and no allowance
becomes or will become payable by the system on account of
his death, his accumulated contributions standing to his
credit in the members deposit fund at the time of his death
shall be paid to such person or pe rsons as he shall have
nominated by written designation duly executed and filed
with the board. If there be no such designated person or
persons surviving such member, such accumulated
contributions shall be paid to his surviving spouse, or to
his estate if there is no surviving spouse.
3. In the event a member's membership in the system
terminates, and no allowance becomes or will become payable
on his account, any accumulated contributions standing to
his credit in the members deposit fund unclaimed by such
member or his legal representative within [three] ten years
after the date his membership terminated, shall be
transferred to the income -expense fund. If thereafter
proper application is made for such accumulated
contributions, the board shall pay them from the income -
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expense fund, but without interest after the date payment
was first due.
70.745. 1. The board shall be the trustees of the
funds of the system. Subject to the provisions of any
applicable federal o r state laws, the board shall have full
power to invest and reinvest the moneys of the system, and
to hold, purchase, sell, assign, transfer or dispose of any
of the securities and investments in which such moneys shall
have been invested, as well as t he proceeds of such
investments and such moneys.
2. The board of trustees may deliberate about, or make
tentative or final decisions on, investments or other
financial matters in a closed meeting under chapter 610 if
disclosure of the deliberatio ns or decisions would
jeopardize the ability to implement a decision or to achieve
investment objectives. A record of the retirement system
that discloses deliberations about, or a tentative decision
on, investments or other financial matters is not a public
record under chapter 610 to the extent and so long as its
disclosure would jeopardize the ability to implement a
decision or to achieve investment objectives.
70.746. Notwithstanding any other provision of law to
the contrary, the board of trustees may delegate to its duly
appointed investment counselor authority to act in place of
the board in the investment and reinvestment of all or part
of the moneys of the system, and may also delegate to such
counselor the authority to act in place of the board in the
holding, purchasing, selling, assigning, transferring, or
disposing of any or all of the securities and investments in
which such moneys shall have been invested, as well as the
proceeds of such investments and such mo neys. [Such
investment counselor shall be registered as an investment
advisor with the United States Securities and Exchange
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Commission.] In exercising or delegating its investment
powers and authority, members of the board shall exercise
ordinary business care and prudence under the facts and
circumstances prevailing at the time of the action or
decision. In so doing, the board shall consider the long -
and short-term needs of the system in carrying out its
purposes, the system's present and ant icipated financial
requirements, the expected total return on the system's
investment, general economic conditions, income, growth,
long-term net appreciation, and probable safety of funds.
No member of the board shall be liable for any action taken
or omitted with respect to the exercise of or delegation of
these powers and authority if such member shall have
discharged the duties of his or her position in good faith
and with that degree of diligence, care, and skill which
prudent men and women w ould ordinarily exercise under
similar circumstances in a like position.
70.747. Notwithstanding any other provision of law to
the contrary, the board shall have full power to invest and
reinvest the funds and moneys of the system in im proved real
estate, including collective real estate funds and real
estate investment trusts, wherever situated [; provided,
however, that not more than one -tenth of the funds and
moneys of the system at the time of such investment shall be
so invested].
70.748. 1. Notwithstanding the provisions of section
105.662 to the contrary, the board may set up and maintain a
local government employee retirement systems of Missouri
investment fund account in which investment and reinvestment
of all or part of the moneys of the retirement system may be
placed and be available for investment purposes.
2. For the purpose of investing the funds of the
retirement system, the funds may be combined with the funds
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of any retirement plan that is administered by the
retirement system under section 70.621 and any retirement
plan established for the purpose of providing benefits for
employees of the system, but the funds of each plan shall be
accounted for separately and for all other reporti ng
purposes shall be separate.
3. The board of trustees may promulgate such rules and
regulations consistent with the provisions of this section
as deemed necessary for its proper administration, pursuant
to the provisions of this section and thi s chapter. Any
rule or portion of a rule, as that term is defined in
section 536.010, that is created under the authority
delegated in this section shall become effective only if it
complies with and is subject to all of the provisions of
chapter 536 and, if applicable, section 536.028. This
section and chapter 536 are nonseverable and if any of the
powers vested with the general assembly pursuant to chapter
536 to review, to delay the effective date, or to disapprove
and annul a rule are subsequ ently held unconstitutional,
then the grant of rulemaking authority and any rule proposed
or adopted after August 28, 2025, shall be invalid and void.
105.688. The assets of a system may be invested,
reinvested and managed by an investm ent fiduciary subject to
the terms, conditions and limitations provided in sections
105.687 to 105.689. An investment fiduciary shall discharge
his or her duties in the interest of the participants in the
system and their beneficiaries and shall:
(1) Act with the same care, skill, prudence, and
diligence under the circumstances then prevailing that a
prudent person acting in a similar capacity and familiar
with those matters would use in the conduct of a similar
enterprise with similar aims;
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(2) Act with due regard for the management,
reputation, and stability of the issuer and the character of
the particular investments being considered;
(3) Make investments for the purposes of providing
benefits to participants and participant s' beneficiaries,
and of defraying reasonable expenses of investing the assets
of the system;
(4) Give appropriate consideration to those facts and
circumstances that the investment fiduciary knows or should
know are relevant to the particular in vestment or investment
course of action involved, including the role of the
investment or investment course of action plays in that
portion of the system's investments for which the investment
fiduciary has responsibility. For purposes of this
subdivision, "appropriate consideration" shall include, but
is not necessarily limited to a determination by the
investment fiduciary that a particular investment or
investment course of action is reasonably designed, as part
of the investments of the system , to further the purposes of
the system, taking into consideration the risk of loss and
the opportunity for gain or other return associated with the
investment or investment course of action; and consideration
of the following factors as they relate to the investment or
investment course of action:
(a) The diversification of the investments of the
system;
(b) The liquidity and current return of the
investments of the system relative to the anticipated cash
flow requirements of the system ; and
(c) The projected return of the investments of the
system relative to the funding objectives of the system;
(5) Give appropriate consideration to investments
which would enhance the general welfare of this state and
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its citizens if those investments offer the safety and rate
of return comparable to other investments available to the
investment fiduciary at the time the investment decision is
made; and
(6) Not be prohibited from closing records to the
extent that such records r elate to information submitted by
an individual, corporation, or other business entity in
connection with investments in or financial transactions
with business entities for investment purposes .