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2011 Legislative Summary

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2011 Legislation Affecting MOSERS

On May 10, 2011, SS for SCS for HB 282 (click here on bill text) was truly agreed to and finally passed by the legislature. If signed into law by Governor Nixon, certain provisions of this legislation will affect the Missouri State Employees’ Retirement Plan, the Missouri Department of Transportation and Highway Patrol Employees’ Retirement System (MPERS), and the Missouri Deferred Compensation as well as employees of the Missouri Development Finance Board (MDFB).

MDFB Employees Become Members of MOSERS
Section 100.273 makes any full-time employee of MDFB who is employed on or after September 1, 2011, a state employee and member of MOSERS. However, these employees will not be covered under the Missouri Consolidated Health Care Plan (MCHCP), unless the MDFB governing board requests coverage and MCHCP’s board approves the request. These employees may purchase credited service toward retirement based on their pre-September 1, 2011, employment with MDFB, and will not be required to be vested before they purchase their prior service. The cost of the full amount of their prior creditable service allowed would be an amount determined to equal the actuarial accrued liability at the time of the purchase to the extent the system’s actuarial accrued liability was funded as of the most recent actuarial valuation. If an employee pays less than the full amount so determined, the employee’s prior creditable service will be prorated accordingly. Employees can purchase prior creditable service any time on or after September 1, 2011, but must do so before applying for retirement. Additional provisions exist that will allow MDFB employees who purchase their prior creditable service and subsequently terminate prior to being vested in the system to receive a refund equal to the purchase amount.

MOSERS/MPERS Transfer of Funds
Section 104.603 requires MOSERS and MPERS to transfer funds between the two systems in connection with service credit transfers occurring on or after September 1, 2011. Upon a reciprocal transfer of creditable or credited service, the sending system from which the service is transferred will be required to pay the receiving system to which the service is transferred an amount equal to the present value of the accrued benefit determined using the same assumptions used in that system’s last regular valuation assuming active member status based on the unit credit actuarial cost method. However, in no event will the payment amount be less than the sum of the member’s accumulated contributions and interest plus any purchased service payments from the member held on deposit by the sending system. In the event the member has received a refund of accumulated contributions from the sending system and forfeited service credit with that system, the member will need to reestablish that service with the sending system by again becoming an active member of either system and satisfying the requirements otherwise stipulated for reestablishing service credit with the sending system.

In addition, the service transfer will not be deemed completed until the sending system makes payment to the receiving system, which payment will be made within 90 days of the date that a completed transfer request is submitted by the member. When the transfer payment includes an amount identified as corresponding to a member’s accumulated contributions, the accumulated contributions portion will be identified and the accumulated contribution balance as of the preceding July l will be identified and the receiving system will be responsible for crediting interest according to the terms of the receiving plan. Lastly, the systems will be required to coordinate their plan administration for reciprocal transfers to give full effect to the transfer and acceptance of corresponding division of benefit orders as well as allowing a survivor to obtain a reciprocal transfer.

Quarterly Investment Reporting to the JCPER
Section 105.661 – This provision will require all public employee defined benefit retirement plans covered under Chapter 105, RSMo, to submit quarterly investment reports to the JCPER in the form and manner requested by the committee. Under this provision, if a plan fails to submit this report, the JCPER may subpoena witnesses, take testimony under oath, and compel the production of records regarding this information, pursuant to its authority under Section 21.561.

State of Missouri Deferred Compensation Plan – Automatic Enrollment
Sections 105.915, 105.927 – These provisions will result in new employees hired on or after July 1, 2012, being automatically enrolled in the State of Missouri Deferred Compensation Plan. The Deferred Compensation Plan is a voluntary state-sponsored program administered by MOSERS that offers state employees the opportunity to save for retirement with before-tax earnings. Under these provisions, a newly hired employee will automatically be enrolled in the deferred compensation plan at 1% of their annual pay unless the employee elects not to participate within the first thirty days of employment. If the employee elects not to participate in the plan during that period, any amounts contributed and earnings thereon will be refunded by the plan to the employee. (State college or university employees are excluded from the automatic enrollment feature but may elect to participate in the plan.)

A default target date fund will automatically be selected for each new employee based on his/her age at date of hire. Employees can choose to “opt out,” if they so desire. In this context, “opting out” could involve electing not to participate, electing to participate but at a lesser amount, electing another fund, electing to defer more than 1% of their annual pay, or combinations of these possibilities.

Additional provisions allow a spouse to automatically be designated as a primary beneficiary unless the spouse consents in writing to allow the participant to designate a non-spouse beneficiary. The legislation also permits the plan administrator (the MOSERS Board of Trustees) to amend plan documents for consistency with federal law. Lastly, provisions exist which clarify that employees who are compensated under a local payroll system (such as MOSERS and MCHCP) are eligible to participate in the state match under the deferred compensation incentive plan.

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MOSERS
Missouri State Employees' Retirement System
Address: 907 Wildwood Dr., Jefferson City, MO 65102
https://www.mosers.org/images/mosers-logo-bg-375-280.jpg Phone: 800.827.1063 URL: Email: mosers@mosers.org Founded On: September 1, 1957