The Regular Session of the 100th General Assembly concluded on Friday, May 17, 2019, with no MPERS related legislation being passed. Throughout the session, there were a number of bills presented that would have some level of implication for MPERS. Some of those bills, which are likely to arise next session, are noted below.
HB 201 Affects Public Plans
This proposal, the same as HB 1673 from last session, would have modified the material required to be included in annual statements to covered members. The additional information would have included: the date of the plan’s valuation, the plan’s funded ratio, notification of placement on the Joint Committee on Public Employee Retirement (JCPER) watchlist, notification when the plans expected employer contributions are not made, and a link or web address pointing to the plan’s annual report. Any plan failing to provide statements, including the additional information, would have to submit, in writing to the joint committee why the information was not provided.
The proposal would have modified the parameters that place a plan in delinquent status. A plan with a funded ratio below 70% (previously 60%) that failed to make the full, actuarially required contribution payment for three (previously five) years would be deemed delinquent. Being delinquent would constitute a first lien on the funds of the political subdivision and compel payment.
HB 609 Affects MPERS
This proposal would have modified terms of the 2011 Tier to restore the lump sum payment, known as BackDROP, for uniformed members of the Highway Patrol as well as radio personnel as defined in section 43.010. Limiting the payment option to a select group of employees could have resulted in equal protection challenges by employees not able to make the payment option election.
When BackDROP was first introduced in 2001, it was reported to be “cost neutral” by the Missouri State Employees’ Retirement System (MOSERS). We have found no records indicating MPERS performed a cost analysis of the original proposal. The fiscal note completed for this bill did reflect an additional, but small cost. Given the provisions of section 105.684 that prohibit the implementation of benefit enhancements for plans with a funded status less than 80%, MPERS could not implement the proposal even if it were passed.
HB 649 Affects MPERS and MOSERS
This bill would have placed elected officials, including statewide elected officials and members of the general assembly, first serving on and after January 1, 2020, into a defined contribution plan. The plan would have included a fixed four percent contribution from both the employer and employee. The proposal was similar to SB 747 from the previous session. Where the proposal differed from prior versions is that it expanded the transition from a defined benefit to a defined contribution plan to employees of the Year 2000 Plan and arguably to all employees, even Closed Plan employees. There were some drafting issues with this bill that were never dealt with during the session. Given that similar bills have been filed for several years, this bill may be introduced next session with the drafting concerns addressed.
HB 1105 Affects MPERS and MOSERS
This cleanup bill filed on behalf of MPERS and MOSERS would have allowed both agencies to update cross-referenced statutes and make technical changes to increase readability and clarity. The bill received a hearing and was voted out of committee; however, it was too late in the session for it to be taken up and passed by either chamber. It is expected that this proposal will be pre-filed next year by the sponsor.
SB 17 Affects Multiple Public Plans
This was the omnibus retirement bill for this session. It included changes affecting the Local Area Government Employees’ Retirement System (LAGERS), Public School Retirement System (PSRS), and the Missouri State Employees’ Retirement System (MOSERS). Nothing in the bill is particularly noteworthy for MPERS, with the exception of one provision applicable to PSRS. PSRS’s retired members are now able to reverse a spousal payment option (an option payable to the spouse upon the death of the member) if a divorce occurs after the member has retired. For some, that may seem logical, however, in plans where retirement benefits are deemed marital property (such as MPERS), it is unheard of.
SB 499 Affects MPERS and MOSERS
This bill was filed to consolidate MPERS and MOSERS. The bill received a hearing, however, no additional action was taken. Senator Schatz, President Pro Tem, recently designated a committee to review this topic further since the last formal review of consolidation occurred in 2005. MPERS board member, Senator Bernskoetter, has been assigned to the committee. We will keep our members informed on any future action regarding consolidation.