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Senate bill would increase retirement age for new state employees

Wednesday, April 21, 2010 | 12:01 a.m. CDT

JEFFERSON CITY — Future state employees have to pay into the retirement system under a Senate bill passed Tuesday.

Under the legislation, state employees hired after Jan. 1, 2011, would have to contribute four percent of their pay to the retirement system. State employees are not required to contribute any percentage of their salary to their retirement plans now.

New employees also would have to work longer before being eligible for retirement.

The measure would do not cover existing state government employees.

The bill passed by a vote of 27-5. Sen. Kurt Schaefer, R-Columbia, said he voted against the bill because he thought the discrepancy between state workers and legislators was unfair.

"It's not going to apply to anyone who's currently in the legislature; it only applies to new legislators," Schaefer said. "If that's the case, I think it should apply now and it should apply to everybody."

The bill would alter the age at which state employees could receive retirement benefits. To receive those benefits, most new government employees would have to wait an additional five years.

A state employee can retire at age 62 after working at least five years or when the employee's age and years service of service to the state equals 80 years. Thus, a person who began as state employee at age 20 can retire with full benefits at age 50.

The Senate-passed plan would raise the combined age and years of service requirement from 80 years to 90 years with an additional requirement of a minimum age of 55. For those with fewer combined years, the minimum retirement age would be raised to 67 with a requirement of at least 10 years service to the state.

An umbrella organization would also be created to organize the investments of the Missouri State Employees Retirement System and the Missouri Department of Transportation and Highway Patrol Employees' Retirement System.

The measure would not cover a number of other separate government retirement systems such as that of the University of Missouri System.

Senate President Pro Tem Charlie Shields, R-St. Joseph, said he wanted to make further changes to the state's retirement program.

"We could continue on this system where we trap people in and ask them to become state employees. And if you just hang on for 30 years, you're gonna get a great benefit out of the deal," Shields said. "That's not what we want out of our state employees, and I don't think that's what the new workforce wants."

Sen. Joan Bray, D-University City, said although the stricter eligibility requirements do not affect current employees, she worries state jobs will become less attractive to those searching the job market.

"I have a lot of angst over what's happening over state employees in general," Bray said. "We are lopping off again this year in the budget process, and that means more pressure, more expectations for those who are remaining. I understand this doesn't affect them but only new hires. I do have a general concern about what we're doing to employees."

The bill's sponsor, Sen. Jason Crowell, R-Cape Girardeau, said concerns such as Bray's would hold more weight if the state weren't trying to recover from a historic decline in revenue collection.

"It's a legitimate concern," Crowell said. "Make no mistake: I, in no way, shape or form, believe that this bill would be moving if we weren't in the economic recession."

 


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Comments

Jack Mitchell April 21, 2010 | 10:01 a.m.

This story barely touches on a very important item. “An umbrella organization would also be created to organize the investments of the Missouri State Employees Retirement System and the Missouri Department of Transportation and Highway Patrol Employees' Retirement System.” This means that the senate voted to EXPAND government yesterday while at the same time take benefits away from state employees. Senator Crowell is lining the pockets of the MOSERS staff. You can bet there is something in it for him as well. This new investment company idea is slipping through and no one is watching. It completely takes all authority away from the MOSERS board. MOSERS could invest MPERS funds without creating a NEW STATE ENTITY. This is totally unnecessary. I cannot believe the Governor and State Treasurer support this loss of control. Nothing but a money grab by greedy politicians.

(Report Comment)
Carl Greeson April 21, 2010 | 12:12 p.m.

I've read the legislation and it seems reasonable. The employee contribution is not large, although it will certainly impact state recruitment where salaries are already too low. The benefit changes are not severe and may help retain experienced workers. The changes do not impact current employees and the bill excludes the teachers retirement system. The state employee changes will help reduce future General Revenue contributions to the two state retirement systems that are included. I do doubt that Schaefer's opposition was only because the bill didn't apply to existing legislators and I wonder if he offered an ammendment to change that part or just voted against the bill. Maybe he actually just wanted it to "apply now", e.g. to existing employees "and to everybody", e.g. to teachers. Who knows what Shields would do to the retirement systems so employees won't be "trapped" and "hang on for 30 years." I think he wants to privatize the plans. But perhaps first voters should untrap him from the legislature.

(Report Comment)

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