Medical incentive

Posted on
Regarding your response to the question on 4/17/2009 in answer to the question about Medical incentive in House Bill 478, I have been tracking the progress of this bill closely and have corresponded with a number of legislators involved in this legislation. I received a response from one legislator that indicated the provisions of 105.684 RSMo might prevent the medical incentive from being implemented should it pass. What can you tell us about that statutory provision?
The statute you reference, 105.684 RSMo was signed into law in 2007. It reads, in part, as follows:
Notwithstanding any law to the contrary, no plan shall adopt or implement any
additional benefit increase, supplement, enhancement, lump sum benefit payments
to participants, or cost-of-living adjustment beyond current plan provisions in
effect prior to August 28, 2007, unless the plan's actuary determines that the
funded ratio prior to such adoption or implementation is at least eighty percent
and will not be less than seventy-five percent after such adoption or
Essentially what this means is that no retirement benefit enhancement may occur if the funding ratio of the system prior to adoption is not at least 80% and after adoption is not at least 75%. This provision is intended to protect retirement systems from the added costs associated with benefit increases when their funding status is not above these thresholds. In other words, if a system is struggling it wouldn’t make sense to add benefits which will further stress the financial stability of the plan.
This provision would not affect implementation of HCS 478 because the incentive pertains to retiree medical insurance, not retirement. From a retirement system perspective there is no benefit increase, consequently there is no cost to the system should this incentive be passed. All costs associated with HCS 478 will affect the Missouri Consolidated Health Care Plan which is not covered by the provisions of 105.684 RSMo. Print Friendly and PDF

Credit for unused sick leave

Posted on
I have heard a rumor that the state might do away with applying our unused sick leave to our credible service at retirement. Presently for every 168 hours of unused sick leave, one month is added to our credible service. Is there any truth to this rumor?
 No, at this time no legislation has been introduced to eliminate the use of unused sick leave for retirement purposes. Print Friendly and PDF

Medical incentive in House Bill 478

Posted on

I’ve heard a rumor that if HB 478 passes that it will bankrupt the retirement system. Is that true?
That legislation would have no financial impact on the retirement system. HCS 478, a substitute to HB 478 was voted out of committee last week. In its present form, an eligible member retiring between February 2009 and January 2010 may continue their medical coverage at active rates for 5 years, or upon reaching eligibility for medicare, whichever comes first. In this form, HCS 478 would result in no additional cost to the retirement system whatsoever because there is no added benefit or change in eligibility requirements. The incentive only applies to those individuals already eligible to retire. Consequently, there would be no additional cost to the retirement system. There would be an added cost for the retiree medical coverage for benefits provided by the Missouri Consolidated Health Care Plan but that cost is unrelated to the retirement system. Print Friendly and PDF