COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1011-01
Bill No.: HB 671
Subject: Retirement-State; Retirement Systems & Benefits-General
Type: Original
Date: March 2, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Various State Funds | ($5,047,330) | ($26,134,009) | ($26,787,359) |
| Total Estimated
Net Effect on All State Funds |
($5,047,330) | ($26,134,009) | ($26,787,359) |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 3 pages.
ASSUMPTION
Officials with the Joint Committee on Public Employee Retirement indicate that the legislation represents a "substantial proposed change" in future plan benefits. As such, an actuarial cost statement is required prior to final action on the legislation by either legislative body or committee thereof.
Officials with the Office of Administration indicate that the affected retirement systems should determine the potential cost of the proposal.
Officials with the Missouri State Employees' Retirement System obtained an actuarial cost study for the proposal, which they assume will increase the formula for calculating the future cost-of-living adjustments (COLA's) in the Missouri State Employees' Plan (MSEP) and the Missouri State Employees' Plan 2000 (MSEP 2000) from 80% of any increase in the Consumer Price Index (CPI) to 100% of the CPI increase, up to a 5% maximum.
MOSERS assumes the proposal will require contributions, as a percentage of payroll, to be increased from 11.59% to 12.73%. Based on a projected June 30, 2002 covered $1.84 billion payroll, the total annual contribution increase will total $21.0 million.
Officials with the Highway & Transportation Employees' and Highway Patrol Retirement System (HRS) assume the proposal will increase the annual COLA to 100% of the CPI increase, instead of the current 80% under the MSEP and the MSEP 2000 for Department of Transportation (MoDOT) and Missouri State Highway Patrol (MSHP) retirees. The system obtained an actuarial report based on the proposal, and assumes annual contributions to the plan will be increased as follows:
MoDOT $3,371,440
MSHP
Non-Uniformed $599,400
Uniformed 1,076,490
1,675,890
Total Cost $5,047,330
These figures represent an increased contribution rate of 1.48% for MoDOT and non-uniformed MSHP employees (total payroll: $268 million), and 2.43% for Uniformed MSHP (total payroll: $44.3 million).
| FISCAL IMPACT - State Government | FY 2002 | FY 2003 | FY 2004 |
| VARIOUS STATE FUNDS | |||
| Costs-MoDOT, MSHP
Increased HRS Contributions |
($5,047,330) |
($5,173,513) |
($5,302,851) |
| Costs-Various State Agencies
Increased MOSERS Contributions |
$0 |
($20,960,496) |
($21,484,508) |
| ESTIMATED NET EFFECT TO
VARIOUS STATE FUNDS |
($5,047,330) |
($26,134,009) |
($26,787,359) |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $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 increases the annual cost-of-living allowance for the Highway and Transportation Employees' and Highway Patrol Retirement System and the Missouri State Employees' Retirement System from 80% to 100% of the increase in the Consumer Price Index.
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
Office of Administration
Missouri State Employees' Retirement System
Highway & Transportation Employees' and Highway Patrol Retirement System
Jeanne Jarrett, CPA
Director
March 2, 2001