SB 1557

                                                                      6554S.03C
                        SENATE COMMITTEE SUBSTITUTE
                                       FOR
                       SENATE BILLS NOS. 1557 & 1054
                                     AN ACT
         To repeal sections 104.1091 and 105.915, RSMo, and to
         enact in lieu thereof two new sections relating to
         retirement.
Be it enacted by the General Assembly of the State of Missouri, as follows:
          Section A.       Sections 104.1091 and 105.915, RSMo, are
   repealed and two new sections enacted in lieu thereof, to be
   known as sections 104.1091 and 105.915, to read as follows:
          104.1091.    1. Notwithstanding any provision of the
   year 2000 plan to the contrary, each person who first
   becomes an employee on or after January 1, 2011, shall be a
   member of the year 2000 plan subject to the provisions of
   this section.
          2. A member's normal retirement eligibility shall be
   as follows:
          (1) The member's attainment of at least age sixty-
   seven and the completion of at least ten years of credited
   service; or the member's attainment of at least age fifty-
   five with the sum of the member's age and credited service
   equaling at least ninety; or, in the case of a member who is
   serving as a uniformed member of the highway patrol and
   subject to the mandatory retirement provisions of section
   104.081, such member's attainment of at least age sixty or
   the attainment of at least age fifty-five with ten years of
   credited service;
          (2) For members of the general assembly, the member's
   attainment of at least age sixty-two and the completion of
   at least three full biennial assemblies; or the member's
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attainment of at least age fifty-five with the sum of the
member's age and credited service equaling at least ninety;
    (3) For statewide elected officials, the official's
attainment of at least age sixty-two and the completion of
at least four years of credited service; or the official's
attainment of at least age fifty-five with the sum of the
official's age and credited service equaling at least ninety.
    3. A vested former member's normal retirement
eligibility shall be based on the attainment of at least age
sixty-seven and the completion of at least ten years of
credited service.
    4. A temporary annuity paid pursuant to subsection 4
of section 104.1024 shall be payable if the member has
attained at least age fifty-five with the sum of the
member's age and credited service equaling at least ninety;
or in the case of a member who is serving as a uniformed
member of the highway patrol and subject to the mandatory
retirement provisions of section 104.081, the temporary
annuity shall be payable if the member has attained at least
age sixty, or at least age fifty-five with ten years of
credited service.
    5. A member, other than a member who is serving as a
uniformed member of the highway patrol and subject to the
mandatory retirement provisions of section 104.081, shall be
eligible for an early retirement annuity upon the attainment
of at least age sixty-two and the completion of at least ten
years of credited service.   A vested former member who
terminated employment prior to the attainment of early
retirement eligibility shall not be eligible for early
retirement.
    6. The provisions of subsection 6 of section 104.1021
and section 104.344 as applied pursuant to subsection 7 of
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section 104.1021 and section 104.1090 shall not apply to
members covered by this section.
    7. The minimum credited service requirements of five
years contained in sections 104.1018, 104.1030, 104.1036,
and 104.1051 shall be ten years for members covered by this
section. The normal and early retirement eligibility
requirements in this section shall apply for purposes of
administering section 104.1087.
    8. A member shall be required to contribute four
percent of the member's pay to the retirement system, which
shall stand to the member's credit in his or her individual
account with the system, together with investment credits
thereon, for purposes of funding retirement benefits payable
under the year 2000 plan, subject to the following
provisions:
    (1) The state of Missouri employer, pursuant to the
provisions of 26 U.S.C. Section 414(h)(2), shall pick up and
pay the contributions that would otherwise be payable by the
member under this section.    The contributions so picked up
shall be treated as employer contributions for purposes of
determining the member's pay that is includable in the
member's gross income for federal income tax purposes;
    (2) Member contributions picked up by the employer
shall be paid from the same source of funds used for the
payment of pay to a member.   A deduction shall be made from
each member's pay equal to the amount of the member's
contributions picked up by the employer.    This deduction,
however, shall not reduce the member's pay for purposes of
computing benefits under the retirement system pursuant to
this chapter;
    (3) Member contributions so picked up shall be
credited to a separate account within the member's
individual account so that the amounts contributed pursuant
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to this section may be distinguished from the amounts
contributed on an after-tax basis;
    (4) The contributions, although designated as employee
contributions, shall be paid by the employer in lieu of the
contributions by the member.    The member shall not have the
option of choosing to receive the contributed amounts
directly instead of having them paid by the employer to the
retirement system;
    (5) Interest shall be credited annually on June
thirtieth based on the value in the account as of July first
of the immediately preceding year at a rate of four
percent. Effective June 30, 2014, and each June thirtieth
thereafter, the interest crediting rate shall be equal to
the investment rate that is published by the United States
Department of the Treasury, or its successor agency, for
fifty-two week treasury bills for the relevant auction that
is nearest to the preceding July first, or a successor
treasury bill investment rate as approved by the board if
the fifty-two week treasury bill is no longer issued.
Interest credits shall cease upon termination of employment
if the member is not a vested former member.    Otherwise,
interest credits shall cease upon retirement or death;
    (6) (a)   A vested former member or a former member who
is not vested may request a refund of his or her
contributions and interest credited thereon.    If such member
is married at the time of such request, such request shall
not be processed without consent from the spouse.    Such
member is not eligible to request a refund if such member's
retirement benefit is subject to a division of benefit order
pursuant to section 104.1051.   [Such refund]
    (b) For a former member who is not vested, the system
shall refund the former member's contributions and interest
credited thereon if the total amount thereof is one thousand
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dollars or less, or such other amount as may be permitted
under applicable federal law.
       a. The system and the treasurer are authorized to
share information consistent with section 447.560 for the
purpose of the system's refunding the former member's
contributions and credited interest directly to the former
member or the former member's survivor or beneficiary.
       b. The availability of the shared information for
public inspection shall be consistent with section 447.560.
       c. The system's procedures in effect from time to time
to locate such former member, survivor, or beneficiary shall
be considered reasonable and necessary diligence consistent
with good business practice and in compliance with federal
law.
       (c) Contribution refunds shall be paid by the system
within an administratively reasonable period, but no sooner
than ninety days from the date of termination of
employment. The amount refunded shall include all employee
contributions made to any retirement plan administered by
the system and interest credited thereon.
       (d) A vested former member may not request a refund
after such member becomes eligible for normal retirement.
       (e) A vested former member or a former member who is
not vested who receives a refund shall forfeit all the
member's credited service and future rights to receive
benefits from the system and shall not be eligible to
receive any disability benefits; provided that any member or
vested former member receiving disability benefits shall not
be eligible for a refund.   If such member subsequently
becomes an employee and works continuously for at least one
year, the credited service previously forfeited shall be
restored if the member returns to the system the amount
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previously refunded plus interest at a rate established by
the board;
    (7) The beneficiary of any member who made
contributions shall receive a refund upon the member's death
equal to the amount, if any, of such contributions and
interest credited thereon less any retirement benefits
received by the member unless an annuity is payable to a
survivor or beneficiary as a result of the member's death.
In that event, the beneficiary of the survivor or
beneficiary who received the annuity shall receive a refund
upon the survivor's or beneficiary's death equal to the
amount, if any, of the member's contributions less any
annuity amounts received by the member and the survivor or
beneficiary.
    9. The employee contribution rate, the benefits
provided under the year 2000 plan to members covered under
this section, and any other provision of the year 2000 plan
with regard to members covered under this section may be
altered, amended, increased, decreased, or repealed, but
only with respect to services rendered by the member after
the effective date of such alteration, amendment, increase,
decrease, or repeal, or, with respect to interest credits,
for periods of time after the effective date of such
alteration, amendment, increase, decrease, or repeal.
    10. For purposes of members covered by this section,
the options under section 104.1027 shall be as follows:
                          Option 1.
    A retiree's life annuity shall be reduced to a certain
percent of the annuity otherwise payable.   Such percent
shall be eighty-eight and one half percent adjusted as
follows: if the retiree's age on the annuity starting date
is younger than sixty-seven years, an increase of three-
tenths of one percent for each year the retiree's age is
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younger than age sixty-seven years; and if the beneficiary's
age is younger than the retiree's age on the annuity
starting date, a decrease of three-tenths of one percent for
each year of age difference; and if the retiree's age is
younger than the beneficiary's age on the annuity starting
date, an increase of three-tenths of one percent for each
year of age difference; provided, after all adjustments the
option 1 percent cannot exceed ninety-four and one quarter
percent. Upon the retiree's death, fifty percent of the
retiree's reduced annuity shall be paid to such beneficiary
who was the retiree's spouse on the annuity starting date or
as otherwise provided by subsection 5 of this section.
                          Option 2.
    A retiree's life annuity shall be reduced to a certain
percent of the annuity otherwise payable.   Such percent
shall be eighty-one percent adjusted as follows:   if the
retiree's age on the annuity starting date is younger than
sixty-seven years, an increase of four-tenths of one percent
for each year the retiree's age is younger than sixty-seven
years; and if the beneficiary's age is younger than the
retiree's age on the annuity starting date, a decrease of
five-tenths of one percent for each year of age difference;
and if the retiree's age is younger than the beneficiary's
age on the annuity starting date, an increase of five-tenths
of one percent for each year of age difference; provided,
after all adjustments the option 2 percent cannot exceed
eighty-seven and three quarter percent.   Upon the retiree's
death one hundred percent of the retiree's reduced annuity
shall be paid to such beneficiary who was the retiree's
spouse on the annuity starting date or as otherwise provided
by subsection 5 of this section.
                          Option 3.
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    A retiree's life annuity shall be reduced to ninety-
three percent of the annuity otherwise payable.   If the
retiree dies before having received one hundred twenty
monthly payments, the reduced annuity shall be continued for
the remainder of the one hundred twenty-month period to the
retiree's designated beneficiary provided that if there is
no beneficiary surviving the retiree, the present value of
the remaining annuity payments shall be paid as provided
under subsection 3 of section 104.620.   If the beneficiary
survives the retiree but dies before receiving the remainder
of such one hundred twenty monthly payments, the present
value of the remaining annuity payments shall be paid as
provided under subsection 3 of section 104.620.
                          Option 4.
    A retiree's life annuity shall be reduced to eighty-six
percent of the annuity otherwise payable.   If the retiree
dies before having received one hundred eighty monthly
payments, the reduced annuity shall be continued for the
remainder of the one hundred eighty-month period to the
retiree's designated beneficiary provided that if there is
no beneficiary surviving the retiree, the present value of
the remaining annuity payments shall be paid as provided
under subsection 3 of section 104.620.   If the beneficiary
survives the retiree but dies before receiving the remainder
of such one hundred eighty monthly payments, the present
value of the remaining annuity payments shall be paid as
provided under subsection 3 of section 104.620.
    11. The provisions of subsection 6 of section 104.1024
shall not apply to members covered by this section.
    12. Effective January 1, 2018, a member who is not a
statewide elected official or a member of the general
assembly shall be eligible for retirement under this
subsection subject to the following conditions:
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    (1) A member's normal retirement eligibility shall be
based on the attainment of at least age sixty-seven and the
completion of at least five years of credited service; or
the member's attainment of at least age fifty-five with the
sum of the member's age and credited service equaling at
least ninety; or in the case of a member who is serving as a
uniformed member of the highway patrol and subject to the
mandatory retirement provisions of section 104.081, such
member's attainment of at least age sixty or the attainment
of at least age fifty-five with five years of credited
service;
    (2) A vested former member's normal retirement
eligibility shall be based on the attainment of at least age
sixty-seven and the completion of at least five years of
credited service; except that, a vested former member who
terminates employment after the attainment of normal
retirement eligibility as described in subdivision (1) of
this subsection shall be covered under such subdivision;
    (3) A temporary annuity paid under subsection 4 of
section 104.1024 shall be payable if the member has attained
at least age fifty-five with the sum of the member's age and
credited service equaling at least ninety; or in the case of
a member who is serving as a uniformed member of the highway
patrol and subject to the mandatory retirement provisions of
section 104.081, the temporary annuity shall be payable if
the member has attained at least age sixty, or at least age
fifty-five with five years of credited service;
    (4) A member, other than a member who is serving as a
uniformed member of the highway patrol and subject to the
mandatory retirement provisions of section 104.081, shall be
eligible for an early retirement annuity upon the attainment
of at least age sixty-two and the completion of at least
five years of credited service.       A vested former member who
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terminated employment prior to the attainment of early
retirement eligibility shall not be eligible for early
retirement;
    (5) The normal and early retirement eligibility
requirements in this subsection shall apply for purposes of
administering section 104.1087;
    (6) The survivor annuity payable under section
104.1030 for vested former members who terminated employment
prior to the attainment of early retirement eligibility and
who are covered by this section shall not be payable until
the deceased member would have reached his or her normal
retirement eligibility under this subsection;
    (7) The annual cost-of-living adjustment payable under
section 104.1045 shall not commence until the second
anniversary of the annuity starting date for vested former
members who terminated employment prior to the attainment of
early retirement eligibility and who are covered by this
subsection;
    (8) The unused sick leave credit granted under
subsection 2 of section 104.1021 shall not apply to members
covered by this subsection unless the member terminates
employment after reaching normal retirement eligibility or
becoming eligible for an early retirement annuity under this
subsection; and
    (9) The minimum credited service requirements of five
years contained in sections 104.1018, 104.1030, 104.1036,
and 104.1051 shall be five years for members covered by this
subsection.
    105.915.   1. The board of trustees of the Missouri
state employees' retirement system shall administer the
deferred compensation fund for the employees of the state of
Missouri that was previously administered by the deferred
compensation commission, as established in section 105.910,
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prior to August 28, 2007.   The board shall be vested with
the same powers that it has under chapter 104 to enable it
and its officers, employees, and agents to administer the
fund under sections 105.900 to 105.927.
    2. Except as provided in this subsection,
participation in such plan shall be by a specific written
agreement between state employees and the state, which shall
provide for the deferral of such amounts of compensation as
requested by the employee subject to any limitations imposed
under federal law.   Participating employees must authorize
that such deferrals be made from their wages for the purpose
of participation in such program.    An election to defer
compensation shall be made before the beginning of the
[month in] payroll period for which the compensation is
paid. Contributions shall be made for payroll periods
[occurring on or after the first day of the month] beginning
after the election is made.
    3. Each employee eligible to participate in the plan
hired or rehired on or after July 1, 2012, shall be enrolled
in the plan automatically and his or her employer shall, in
accordance with the plan document, withhold and contribute
to the plan an amount equal to one percent of eligible
compensation received on and after the date of hire, unless
the employee elects not to participate in the plan within
the first thirty days of employment, and in that event, any
amounts contributed and earnings thereon will be refunded by
the plan to the employee pursuant to the procedure contained
in the plan documents.   Employees who are employed by a
state college or university shall not be automatically
enrolled but may elect to participate in the plan and make
contributions in accordance with the terms of the plan.
    4. Effective July 1, 2027:
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    (1) The plan document shall provide for automatic
increases in the deferral amount contributed by a
participating employee commencing with the first payroll
period following the employee's one-year anniversary date of
employment or reemployment, whichever is later.    The
deferral amount shall increase annually by one-half of one
percent until the amount reaches ten percent of the
employee's eligible compensation or the limitation imposed
under federal law, whichever is less.
    (2) Each employee eligible to participate in the plan
who was last hired or rehired on or after July 1, 2012, and
before July 1, 2027, who was automatically enrolled in the
plan pursuant to subsection 3 of this section, and whose
contribution is equal to one percent of eligible
compensation on the effective date, shall be enrolled in
such automatic increases.
    (3) Each employee eligible to participate in the plan
who was last hired or rehired on or after July 1, 2027,
shall be enrolled in such automatic increases.
    5. Employees who are enrolled automatically or whose
deferral amounts are automatically increased may elect to
change the contribution rate in accordance with the terms of
the plan. Employees who elect not to participate in the
plan may at a later date elect to participate in the plan
and make contributions in accordance with the terms of the
plan. All assets and income of such fund shall be held in
trust by the board for the exclusive benefit of participants
and their beneficiaries.    Assets of such trust, and the
trust established pursuant to section 105.927, may be pooled
solely for investment management purposes with assets of the
trust established under section 104.320.
    [3.] 6. Notwithstanding any other provision of
sections 105.900 to 105.927, funds held for the state by the
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board in accordance with written deferred compensation
agreements between the state and participating employees may
be invested in such investments as are deemed appropriate by
the board. All administrative costs of the program
described in this section, including staffing and overhead
expenses, may be paid out of assets of the fund, which may
reduce the amount due participants in the fund.    Such
investments shall not be construed to be a prohibited use of
the general assets of the state.
     [4.] 7. Investments offered under the deferred
compensation fund for the employees of the state of Missouri
shall be made available at the discretion of the board.
     [5.] 8. The board and employees of the Missouri state
employees' retirement system shall be immune from suit and
shall not be subject to any claim or liability associated
with any administrative actions or decisions made by the
commission with regard to the deferred compensation program
prior to the transfer made to the board under section
105.910.
     [6.] 9. The board and employees of the system shall
not be liable for the investment decisions made or not made
by participating employees as long as the board acts with
the same skill, prudence, and diligence in the selection and
monitoring of providers of investment products, education,
advice, or any default investment option, 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.
     [7.] 10.   The system shall be immune from suit and
shall not be subject to any claim or liability associated
with the administration of the deferred compensation fund by
the board and employees of the system.
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    [8.] 11.   Beginning on or after September 1, 2011, if a
participant under the deferred compensation plan or the plan
established under section 105.927 is married on the date of
his or her death, the participant's surviving spouse shall
be automatically designated as the primary beneficiary under
both plans, unless the surviving spouse consented in
writing, witnessed by a notary public, to allow the
participant to designate a nonspouse beneficiary.    As used
in this subsection, "surviving spouse" means the spouse as
defined pursuant to section 104.012 to whom the participant
is lawfully married on the date of death of the participant,
provided that a former spouse shall be treated as the
surviving spouse of the participant to the extent provided
under a judgment, decree, or order that relates to child
support, alimony payments, or marital property rights made
under Missouri domestic relations law that creates or
recognizes the existence of such former spouse's right to
receive all or a portion expressed as a stated dollar amount
or specific percentage stated in integers of the benefits
payable from such plan upon the death of the participant.
This subsection shall not apply to beneficiary designations
made prior to September 1, 2011.
    [9.] 12.   The board may adopt and amend plan documents
to change the terms and conditions of the deferred
compensation plan and the plan established under section
105.927 that are consistent with federal law.
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