COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 0385-07
Bill No.: Truly Agreed to and Finally Passed SCS for HCS for HB 152 and 180
Subject: Retirement Systems and Benefits - General; Law Enforcement Officers and Agencies
Type: Original
Date: May 22, 2003
FISCAL SUMMARY
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Total Estimated
Net Effect on General Revenue Fund |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Total Estimated
Net Effect on Other State Funds |
$0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 6 pages.
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Local Government | $0 | $0 | $0 |
ASSUMPTION
The Joint Committee on Public Employee Retirement indicates that this legislation does not represent a "substantial proposed change" in future plan benefits as defined in Section 105.660(5), and, as such, an actuarial cost statement is not required.
Officials with the Department of Insurance (INS) assume the proposal has no fiscal impact on their agency.
Officials with the Kansas City Police Retirement System (KCPRS) and St. Louis Police Retirement System assume the proposal will have no fiscal impact on their agency.
Educational Seminars
Officials from the Police Retirement System of Kansas City, City of Kansas City, and Local Government Employees Retirement System assume the proposed legislation will not fiscally impact their organization.
ASSUMPTION (continued)
The Joint Committee on Public Employee Retirement (JCPER) has reviewed this proposal and has determined an actuarial study is not needed under the provisions of section 105.660, subdivision (5).
Job-Sharing
Officials from the Public School Retirement System of Missouri and the Non-Teacher Retirement System of Missouri assume this proposal will have no fiscal impact on the retirement system.
The Joint Committee on Public Employee Retirement (JCPER) has reviewed this proposal and has determined an actuarial study is not needed under the provisions of section 105.660, subdivision (5).
Officials from the Department of Elementary and Secondary Educational indicated there would be no fiscal impact to their agency; however, local school districts could likely see increased administrative costs. DESE could not estimate to what extent administrative costs wold increase. The increase would be contingent upon the level of participation in job-sharing by classroom teachers statewide.
Oversight assumes administrative costs associated with the job-sharing program would not be material, and could be absorbed within existing resources.
| FISCAL IMPACT - State Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| $0 | $0 | $0 | |
| FISCAL IMPACT - Local Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This bill makes various changes to public employee retirement systems.
ST. LOUIS POLICE RETIREMENT SYSTEM
The bill makes technical corrections to the Deferred Retirement Option Plan (DROP) for the St. Louis City Police Retirement System.
KANSAS CITY POLICE AND CIVILIAN EMPLOYEES' RETIREMENT SYSTEMS
Concerning the Kansas City Police Retirement System and Civilian Employees' Retirement Systems, the bill:
(1) Requires benefits and conditions to always be adjusted to qualify for tax-exempt status;
(2) Requires a member's benefits to be 100% vested and nonforfeitable upon the member's attainment of the normal retirement age;
(3) Requires the distribution of retirement benefits to begin no later than April 1 of the year following the calendar year during which the member becomes 70 1/2 years of age;
(4) Prohibits benefits in excess of the limits set by Section 415 of the Internal Revenue Code;
(5) Limits the total salary taken into account for any purpose for any member to no more than $200,000 per year, subject to adjustments permitted by the Internal Revenue Code;
(6) Gives the Retirement Board authority to change actuarial assumptions at any time annually, but a change in actuarial assumptions may not result in any decrease in benefits accrued as of the effective date of the change;
(7) Allows a member or beneficiary to transfer an eligible rollover distribution to another eligible retirement plan;
(8) Gives the board authority to provide fiduciary liability insurance;
(9) Makes other changes to conform with the Internal Revenue Code;
(10) Changes the requirements for the five elected members of the Kansas City Police Retirement Board;
(11) Allows members to receive a partial lump-sum option payment;
(12) Makes the retirement boards state agencies for the purpose of the administrative procedure and review process;
DESCRIPTION (continued)
(13) Requires the Kansas City Police Department to grant authorized leave with pay to active police officers and civilian employees to attend educational seminars and similar functions for a period not to exceed 10 days in any calendar year;
(14) Authorizes the City of Kansas City and the Kansas City Police Department to adopt a program of incentives to encourage early retirement of members and civilian employees, contingent upon the city requesting and agreeing to increase financial contributions to the police retirement system; and
(15) Requires a funeral benefit of $1,000 to be paid in addition to all other benefits for a civilian employee.
TEACHING PERSONNEL, PUBLIC SCHOOL RETIREMENT SYSTEMS, AND THE NON-TEACHER SCHOOL RETIREMENT SYSTEM
The bill requires the State Board of Education to develop rules to facilitate job-sharing positions for classroom teachers. The bill contains a definition for "job-sharing position" and entitles teachers in these positions to certain employment and retirement benefits.
In addition, the bill makes the following changes to retirement systems in school districts with 300,000 residents or less and the Non-Teacher School Retirement System:
(1) Requires the Board of Trustees fo both systems to determine and certify to employers the level rate of contribution and specifies the time period that the rate should be established;
(2) Requires the level rate of contribution for a fiscal year not to exceed the rate of contribution for the prior fiscal year by more than 0.5%. The level rate contribution for the Non-Teacher School Retirement System for a fiscal year will not exceed the rate of contribution for the prior fiscal year by more than 0.25%;
(3) Requires the boards to determine and certify the level rate of contribution for a fiscal year based on actuarial valuation;
(4) Requires the boards to have an actuary conduct an actuarial valuation every 10 years; and
(5) Prohibits legislation from being enacted after July 1, 2003, which provides benefit increases to members and retirees of both systems until the contribution rate is equal to or less than the contribution rate in effect on July 1, 2003.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Joint Committee on Public Employee Retirement
Department of Insurance
Kansas City Police Retirement System
City of Kansas City
Local Government Employees Retirement System
Department of Elementary and Secondary Education
Public School Retirement System
Mickey Wilson, CPA
Director
May 22, 2003