Read this recent good news from our educational leaders in Missouri.

Missouri NEA Daily Legislative Update – Week 8, No. 3, February 23, 2011
By Otto Fajen – MNEA Legislative Director

HOUSE COMMITTEE TO HEAR DEFINED CONTRIBUTION (DC) BILL FOR  NEW HIRES IN PSRS

The House Retirement Committee is scheduled to hear HB 409 (Andrew Koenig) on February 24.  The bill would automatically place new hires in PSRS/PEERS  into a defined contribution (DC) plan, unless the employee opts into the defined benefit (DB) plan within twelve months of employment.  The investment risk of a DC plan is entirely borne by the employee and there is no guarantee of an adequate pension at retirement time, nor a guarantee that an adequate pension will be available for the remainder of that retired employee’s life.

The Association strongly opposes any effort to establish a DC plan for school employees.  Actuarial analysis of the bill shows that the proposal would massively increase district cost over the next 20 years. The change from DB to DC for many or all new employees would force PSRS/PEERS to change the way that unfunded liability for DB members is handled and require much higher contributions into the system for many years in order to pay off that liability while the DB members are still in active service.

…and from our MNEA Retired President

Subject: NO ACTION on HB 409
Date: February 25, 2011 1:04:55 PM CST

Thanks are in order to Otto Fajen, our MNEA lobbyist and Carol Weatherford, our MNEA-Retired lobbyist.  Due to their in-depth communications with the members of the Retirement Committee on the days before the hearing Thursday, Otto was accurately able to assess that the likelihood of HB 409 (converting PSRS from DB to DC) coming out of committee was slight.  No action was taken on the bill.

In addition to Otto and Carol’s testimony, Steve Yoakum, Executive Director of PSRS testified against the bill along with well-presented testimony from Jan Powers of MRTA and representatives from MSTA, MASA (School Administrators) and MSBS (School Board Association).  The only testimony in favor of the bill came from Aaron Hilmer, Chair of the Mehlville Fire Department Board.

Cecil Sharp
President, MNEA-R