Modifies provisions relating to public employee retirement systems

SECOND REGULAR SESSION
HOUSE COMMITTEE SUBSTITUTE FOR
HOUSE BILL NOS. 2884 & 1655
103RD GENERAL ASSEMBL Y
6036H.03C JOSEPH ENGLER, Chief Clerk
AN ACT
T o repeal sections 86.213, 104.200, 104.490, 104.1060, 104.1092, and 169.450, RSMo, and
to enact in lieu thereof seven 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 86.213, 104.200, 104.490, 104.1060, 104.1092, and 169.450,
2 RSMo, are repealed and seven new sections enacted in lieu thereof, to be known as sections
3 86.213, 104.200, 104.490, 104.1060, 104.1092, 105.695, and 169.450, to read as follows:
86.213. 1. The general administration and the responsibility for the proper operation
2 of the retirement system and for making effectiv e the provisions of sections 86.200 to 86.366
3 are hereby vested in a board of trustees of nine persons. The board shall be constituted as
4 follows:
5 (1) The comptroller of the city , ex of ficio. If the comptroller is absent from any
6 meeting of the board of trustees for any cause whatsoever , the comptroller may be represented
7 by either the deputy comptroller or the first assistant comptroller who in such case shall have
8 full power to act as a member of the said board of trustees;
9 (2) T wo members to be appointed by the mayor of the city , pr ovided that, effective
10 October 1, 2026, the mayor shall appoint one member to serve a term of one year and
11 one to serve a term of two years and ther eafter , each appointee to serve for a term of two
12 years, except the mayor shall not appoint the police chief of the municipal police force or the
13 city's director of public safety;
14 (3) Three members who ar e actively commissioned officers of the municipal
15 police forc e of any city not within a county to be elected by [ the ] those members of the
16 retirement system who ar e actively commissioned officers of the municipal police for ce of
EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
17 [ the ] any city not within a county for a term of three years; provided, however , that the term
18 of of fice of the first three members so elected shall begin immediately upon their election and
19 one such member's term shall expire one year from the date the retirement system becomes
20 operative, another such member's term shall expire two years from the date the retirement
21 system becomes operative and the other such member's term shall expire three years from the
22 date the retirement system becomes operative; provided, further , that such members shall be
23 members of the system and hold office only while members of the system;
24 (4) Three members who shall be retired members of the retirement system to be
25 elected by [ the ] those retired members of the retirement system for a term of three years;
26 except that, the term of of fice of the first two members so elected shall begin immediately
27 upon their election and one such member's term shall expire two years from the date of
28 election and the other such member's term shall expire three years from the date of election.
29 2. Any member elected chairman of the board of trustees may serve without term
30 limitations.
31 3. Each actively commissioned elected trustee shall be granted travel time by the St.
32 Louis metropolitan police department to attend any and all functions that have been
33 authorized by the board of trustees of the police retirement system of St. Louis. T ravel time,
34 with compensation, for a trustee shall not exceed thirty days in any board fiscal year .
35 4. Members appointed by the mayor of the city pursuant to subdivision (2) of
36 subsection 1 of this section shall continue to serve until their successors have been
37 appointed.
104.200. Should any error in any records result in any member or beneficiary
2 receiving more or less than he or she would have been entitled to receive had the records been
3 correct, the board shall correct such error , and, as far as practicable, to recover any
4 overpayments, may accept single sum or installment r epayments or make future
5 payments in such a manner that the actuarial equivalent of the benefit to which such member
6 or beneficiary was entitled shall be paid[ , and to this end may recover any overpayments ]
7 until the overpayment is recove red in full . In all cases in which such error has been made,
8 no such error shall be corrected unless the system discovers or is notified of such error within
9 ten years after the member's annuity starting date or the date of error , whichever occurs later .
10 In cases of fraud, any error discovered shall be corrected without concern for the amount of
11 time that has passed.
104.490. 1. Should any error result in any member or beneficiary receiving more or
2 less than he or she would have been entitled to receive had the error not occurred, the board
3 shall correct such error , and, as far as practicable, to recov er any overpayments, may accept
4 single sum or installment repay ments or make future payments in such a manner that the
5 actuarial equivalent of the benefit to which such member or beneficiary was entitled shall be
HCS HBs 2884 & 1655 2
6 paid[ , and to this end may recover any overpayments ] until the overpayment is recover ed in
7 full . In all cases in which such error has been made, no such error shall be corrected unless
8 the system discovers or is notified of such error within ten years after the member's annuity
9 starting date or the date of error , whichever occurs later . In cases of fraud, any error
10 discovered shall be corrected without concern to the amount of time that has passed.
11 2. A person who knowingly makes a false statement, or falsifies or permits to be
12 falsified a record of the system, in an attempt to defraud the system is subject to fine or
13 imprisonment pursuant to the Missouri revised statutes.
14 3. The board of trustees of the Missouri state employees' retirement system shall
15 cease paying benefits to any survivor or beneficiary who is char ged with the intentional
16 killing of a member without legal excuse or justification. A survivor or beneficiary who is
17 convicted of such char ge shall no longer be entitled to receive benefits. If the survivor or
18 beneficiary is not convicted of such char ge, the board shall resume payment of benefits and
19 shall pay the survivor or beneficiary any benefits that were suspended pending resolution of
20 such char ge.
104.1060. 1. Should any error result in any person receiving more or less than the
2 person would have been entitled to receive had the error not occurred, the board shall correct
3 such error , and, as far as practicable, to recover any overpayments, may accept single sum
4 or installment repay ments or make future payments in such a manner that the actuarial
5 equivalent of the annuity to which such person was entitled shall be paid[ , and to this end may
6 recover any overpayments ] until the overpayment is r ecovered in full . In all cases in which
7 such error has been made, no such error shall be corrected unless the system discovers or is
8 notified of such error within ten years after the member's annuity starting date or the date of
9 error , whichever occurs later . In cases of fraud, any error discovered shall be corrected
10 without concern to the amount of time that has passed.
11 2. A person who knowingly makes a false statement, or falsifies or permits to be
12 falsified a record of the system, in an attempt to defraud the system shall be subject to fine or
13 imprisonment under the Missouri revised statutes.
14 3. A board shall not pay an annuity to any survivor or beneficiary who is char ged with
15 the intentional killing of a member , retiree or survivor without legal excuse or justification. A
16 survivor or beneficiary who is convicted of such char ge shall no longer be entitled to receive
17 an annuity . If the survivor or beneficiary is not convicted of such char ge, the board shall
18 resume annuity payments and shall pay the survivor or beneficiary any annuity payments that
19 were suspended pending resolution of such char ge.
104.1092. 1. In lieu of retirement annuity benefits otherwise payable under the
2 closed plan or year 2000 plan, any member who has terminated employment, is entitled to a
3 deferred annuity , and has not yet reached normal retirement age or eligibility may make a
HCS HBs 2884 & 1655 3
4 one-time election to receive a lump sum payment equal to a percentage of the present value of
5 such member's deferred annuity should a board choose to establish such a program by board
6 rule pursuant to section 104.1063.
7 2. Any such election under subsection 1 of this section may be made by the member
8 beginning on [ a date as established by the board under such program but not ] or after [ May
9 31, 2018. After May 31, 2018, no such election shall be made and retirement annuity benefits
10 shall only be paid as otherwise provided by law under this chapter ] January 1, 2027 .
11 3. Any such member making such election under subsection 1 of this section shall
12 forfeit all such member's creditable or credited service and future rights to receive retirement
13 annuity benefits from the system under this chapter and shall not be eligible to receive any
14 long-term disability benefits. If such member subsequently becomes an employee, such
15 member shall be considered a new employee with no prior credited service and shall be
16 subject to the provisions of section 104.1091.
105.695. 1. No contribution or expenditur e of system funds shall be made
2 dir ectly by any public pension system to advocate, support, or oppose the passage or
3 defeat of any ballot measur e or the nomination or election of any candidate for public
4 office. Nor shall any system funds pay any debts or obligations of any committee
5 supporting or opposing such ballot measur es or candidates.
6 2. Nothing in this section shall pr ohibit r etir ement systems and their employees
7 fr om educating and informing members and the public about potential impacts to the
8 system thr ough reg ular system prog rams, proce sses, and job duties.
9 3. For the purposes of this section, the term "system" shall be defined as any
10 r etir ement system established by the state of Missouri or any political subdivision or
11 instrumentality of the state for the purpose of pro viding plan benefits for elected or
12 appointed public officials or employees of the state of Missouri or any political
13 subdivision or instrumentality of the state.
169.450. 1. The general administration and responsibility for the proper operation of
2 the retirement system and for making effectiv e the provisions of sections 169.410 to 169.540
3 are hereby vested in a board of trustees of thirteen persons, as follows:
4 (1) Four trustees to be appointed for terms of four years by the board of education;
5 provided, however , that their terms shall be fixed so the terms of one of the trustees so
6 appointed shall expire each year . The members of such board of trustees appointed by the
7 board of education may be members of the board of education or other individuals deemed
8 qualified to hold such positions by the board of education;
9 (2) Four trustees to be elected for terms of four years by and from the active members
10 of the retirement system who shall hold office as trustees only while active members;
11 provided, however , that their terms shall be fixed so that the terms of one of the trustees so
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12 elected shall expire each year; and provided further , that not more than two of such persons
13 shall be teachers and two shall be nonteachers. For the purposes of this subsection, a school
14 administrator shall not be eligible for the positions established pursuant to this subdivision
15 and shall be eligible for the position established pursuant to subdivision (4) of this subsection;
16 (3) T wo trustees, who shall be retired members, to be elected for terms of four years
17 by and from the retired members of the retirement system; provided, however , that the terms
18 of of fice of the first two trustees so elected shall begin immediately upon their election and
19 shall expire two and four years from the date of their election, respectively; and provided
20 further , that not more than one of such persons shall be a teacher and one shall be a
21 nonteacher;
22 (4) One member , who shall be a school administrator , to be elected for a term of four
23 years by and from the active members of the retirement system who shall hold of fice as a
24 trustee only while an active member; except that, the initial term of of fice of such trustee shall
25 expire on December 31, 1999;
26 (5) T wo trustees to be appointed for terms of four years by the Missouri Charter
27 Public School Association; provided, however , that the terms of of fice of the first two trustees
28 so elected shall begin immediately upon their election and shall expire two and four years
29 from the date of their election, respectively . The members of such board of trustees appointed
30 by the Missouri Charter Public School Association shall have experience or qualifications
31 relevant to public charter schools and the retirement system, and at least one such member
32 shall be a teacher . The appointment of the trustees shall be subject to the same rules and
33 regulations applicable to other trustees, including, but not limited to, taking an oath of of fice
34 as provided in subsection 5 of this section.
35 2. If a vacancy occurs in the of fice of trustee, the vacancy shall be filled for the
36 unexpired term in the same manner as the of fice was previously filled. No vacancy or
37 vacancies on the board of trustees shall impair the power of the remaining trustees to
38 administer the retirement system pending the filling of such vacancies.
39 3. In the event of a lapse of a school district's corporate or ganization as described in
40 subsections 1 and 4 of section 162.081, or for any other reason, the general administration and
41 the responsibility for the proper operation of the retirement system shall continue to be fully
42 vested in the trustees then currently serving and such trustees shall continue to serve and be
43 elected in the same manner as set forth in this statute as if no lapse had occurred, except that
44 in the event of vacancies occurring in the office of trustees appointed by the board of
45 education prior to the lapse, the board of trustees shall appoint a qualified person or persons to
46 fill such vacancy or vacancies for terms of up to four years.
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47 4. T rustees shall serve without compensation, and any trustee shall be reimbursed
48 from the expense fund for all necessary expenses which the trustee may incur through service
49 on the board of trustees.
50 5. Each trustee shall, within ten days after such trustee's appointment or election, take
51 an oath of of fice before the clerk of the circuit court of the judicial circuit in which the school
52 district is located that, so far as it devolves upon the trustee, the trustee will diligently and
53 honestly administer the af fairs of the board of trustees and that the trustee will not knowingly
54 violate or willingly permit to be violated any of the provisions of the law applicable to the
55 retirement system. Such oath shall be subscribed to by the trustee making it and filed in the
56 of fice of the clerk of the circuit court.
57 6. The circuit court of the judicial circuit in which the school district is located shall
58 have jurisdiction over the members of the board of trustees to require them to account for
59 their of ficial conduct in the management and disposition of the funds and property committed
60 to their char ge; to order , decree and compel payment by them to the public school retirement
61 system of their school district of all sums of money , and of the value of all property which
62 may have been improperly retained by them, or transferred to others, or which may have been
63 lost or wasted by any violation of their duties or abuse of their powers as such members of
64 such board; to remove any such member upon proof that the trustee has abused the trustee's
65 trust or has violated the duties of the trustee's of fice; to restrain and prevent any alienation or
66 disposition of property of such public school retirement system by the members, in cases
67 where it may be threatened, or there is good reason to apprehend that it is intended to be made
68 in fraud of the rights and interests of such public school retirement system. The jurisdiction
69 conferred by sections 169.410 to 169.540 shall be exercised as in ordinary cases upon
70 petition, filed by the board of education of such school district, or by any two members of the
71 board of trustees. Such petition shall be heard in a summary manner after ten days' notice in
72 writing to the member complained of, and an appeal shall lie from the judgment of the circuit
73 court as in other causes and be speedily determined, but such appeal shall not operate under
74 any condition as a supersedeas of a judgment of removal from of fice.
75 7. Each trustee shall be entitled to one vote in the board of trustees. [ Six votes shall be
76 necessary for a decision by the trustees at any meeting of the board of trustees. ] Seven
77 members of the board of trustees shall constitute a quorum for the transaction of
78 business at any meeting of the board of trustees. Notwithstanding the for egoing, no
79 action or decision of the board of trustees shall be effective unless appr oved by the
80 affirmative vote of at least seven members of the board of trustees.
81 8. Subject to the limitations of sections 169.410 to 169.540, the board of trustees
82 shall, from time to time, establish rules and regulations for the administration of the
83 retirement system, for eligibility for and determination of benefits under the retirement
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84 system, for the investment of retirement system assets, and for the transaction of the
85 retirement system's business.
86 9. The board of trustees shall elect from its membership a chairman and shall, by
87 majority vote of its members, appoint a secretary , who may be, but need not be, one of its
88 members. It shall engage such actuarial and other services as shall be required to transact the
89 business of the retirement system. It shall also engage an investment counselor who shall be
90 experienced in the investment of moneys to advise the trustees on investments of the
91 retirement system. The compensation of all persons engaged by the board of trustees and all
92 other expenses of the board necessary for the operation of the retirement system shall be paid
93 at such rates and in such amounts as the board of trustees shall approve.
94 10. The board of trustees shall keep in convenient form such data as shall be
95 necessary for actuarial valuations of the assets of the retirement system and for checking the
96 experience of the system.
97 1 1. The board of trustees shall keep a record of all its proceedings which shall be
98 open to public inspection. It shall prepare annually and send to the board of education and to
99 each member of the retirement system a report showing the fiscal transactions of the
100 retirement system for the preceding fiscal year , a detailed listing of all salaries and
101 expenditures incurred by the trustees for its operation, the amount of the accumulated cash
102 and securities of the system, and the last balance sheet showing the financial condition of the
103 system by means of an actuarial valuation of the assets and liabilities of the retirement
104 system. The board of trustees shall also prepare or cause to be prepared an annual report
105 concerning the operation of the retirement system herein provided for , which report shall be
106 sent by the chairman of the board of trustees to the board of education.
107 12. The board of trustees shall arrange for necessary legal advice for the operation of
108 the retirement system.
109 13. The board of trustees shall designate a medical board to be composed of three
110 physicians, none of whom shall be eligible for benefits pursuant to sections 169.410 to
111 169.540, who shall arrange for and pass upon all medical examinations required pursuant to
112 the provisions of sections 169.410 to 169.540, shall investigate all essential statements and
113 certificates made by or on behalf of a member in connection with an application for disability
114 retirement and shall report in writing to the board of trustees its conclusions and
115 recommendations upon all matters referred to it.
116 14. The actuary shall be the technical adviser of the board of trustees on matters
117 regarding the operation of the system created by sections 169.410 to 169.540 and shall
118 perform such other duties as are required in connection therewith. Such person shall be
119 qualified as an actuary by membership as a fellow in the Society of Actuaries or by objective
120 standards which are no less stringent than those established by the Society of Actuaries.
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121 15. At least once in each five-year period the actuary shall make an investigation into
122 the actuarial experience of the retirement system, and taking into account the results of such
123 investigation of the experience, the board of trustees shall adopt for the retirement system
124 such actuarial assumptions as shall be deemed necessary .
125 16. On the basis of such actuarial assumptions as the board of trustees shall adopt, the
126 actuary shall make an annual valuation of the assets and liabilities of the funds of the
127 retirement system.
128 17. On the basis of the valuation the board of trustees shall certify the rates of
129 contribution payable by the board of education.
✔
HCS HBs 2884 & 1655 8