JEFFERSON CITY — Missouri senators have endorsed legislation designed to save money through changes to public retirement systems, including increasing the minimum retirement age and requiring workers to contribute to their pensions.
The bill affects Missouri's main pension plan — the Missouri State Employees' Retirement System — and a retirement system for the Highway Patrol and Department of Transportation. It only would affect new employees added to state payrolls starting in 2011.
Senators approved the measure by voice vote on Monday, and it needs another round of approval before it can move to the House. Supporters touted the possible savings by tightening the retirement system for future workers.
The bill's sponsor, Sen. Jason Crowell, R-Cape Girardeau, provided an estimate predicting the entire bill would save Missouri $34 million next year. Over the next five years, the state would save a combined $315 million. He said the legislation attempts to make a "common sense reform" while providing benefits to workers.
Crowell serves on the board of trustees for the main state employee retirement system.
Another backer pointed to the state's budget troubles and said some action needs to be taken.
State revenue has fallen this year, and Missouri lawmakers have cut several hundred million dollars from the governor's original budget proposal.
Under the Senate retirement bill, new workers would be required to pay 4 percent of their pay into the retirement system. Currently workers do not pay anything, and their benefits are funded through the investment income of the pension system and state money.
The legislation also increases minimum retirement ages to get full benefits.
Ordinary state workers currently can retire at 62-years-old after five years of service; that would be increased to 67-years-old after 10 years of service. State employees also currently can retire when their age plus the number of years working for state government equal 80 if the worker is at least 48-years-old. That option would be increased to 90, and the worker would need to be at least 55-years-old.
Besides changes to future state workers pension plans, the legislation also allows the state auditor to review pension systems and establishes a new board to help manage the assets of the Missouri State Employees' Retirement System and the system for the Highway Patrol and Department of Transportation.
Other public pensions systems — except retirement systems for public school employees and local government workers — could apply to have the newly created board oversee their assets.