Missouri state employees hired after Jan. 1, 2011, will have to contribute 4% of their pay to their retirement plans under a proposal approved this week by the Missouri General Assembly and awaiting the signature of Gov. Jay Nixon.
Scott Holste, the governor's spokesman, said in a telephone interview that a date had not been set to sign the pension reform bill, adding the legislation is “still under review.”
Currently, employees in the two affected systems — the $7 billion Missouri State Employees' Retirement System and the $1.3 billion Missouri Department of Transportation and Patrol Employees' Retirement System, both in Jefferson City — do not contribute to their retirement savings. The contribution comes entirely from the state.
The bill, which was approved July 14, in a special session of the Missouri General Assembly, also requires employees to work 10 years before becoming vested.
The final version of the bill did not include a plan to establish a single investment board to oversee the investment assets of the two retirement systems.
Rep. James Viebrock, who sponsored the bill, could not be reached for comment.
MOSERS spokeswoman Christine Rackers, in an e-mail response to questions, said the state contribution for fiscal year 2011, which will end June 30, 2011, is 13.81% for MOSERS and 41.27% for MPERS.
“Today these pension plans have two funding sources; state contributions and investment income,” she wrote. “Approximately two-thirds of the money in the MOSERS trust fund comes from investment earnings.
“With the passage of this legislation these pension plans will have an additional funding source — a 4% of pay employee contribution, from employees hired after Jan. 1, 2011. The long-term effect of implementing employee contributions will be reflected in a decrease in the normal cost of the retirement plans.”
