Qualifying for pension won’t take as long for some Missouri workers under bill OK’d by lawmakers

May 12--JEFFERSON CITY -- State prison guards, social workers and other government employees won't have to spend as much time on the state payroll to qualify for a pension under legislation approved in the Legislature Thursday.

The proposal, which now heads to Gov. Eric Greitens' desk, would allow workers to qualify for pensions at age 67 after working five years, rather than the current 10-year time frame.

The measure comes in response to a decision by Gov. Eric Greitens and the Legislature not to raise wages for the lowest-paid state employees in the nation.

By shortening the so-called "vesting period" to qualify for a pension, supporters hope it will keep employees from departing the government workforce for more lucrative paying private sector jobs.

Altering worker pensions was among a series of recommendations made in a report issued last year that found Missouri state workers are paid the lowest in the nation. The low wages have driven up turnover rates among employees.

"The millennial generation has shown a willingness to change jobs often and typically places a much higher value on benefits that vest quickly and are transportable," the $300,000 report noted. "Additionally, the 10-year vesting creates a challenge in attracting 'second careers employees, who may be deterred by the 10-year requirement."

Lawmakers and former Gov. Jay Nixon approved the 10-year qualifying period in 2010 as a way to offer Ford Motor Co. and other car makers $150 million in tax breaks to keep their facilities in Missouri. It went into effect for new hires beginning in January 2011 and was projected to save the state an estimated $660 million over 10 years.

The same law also increased the retirement age to 67, up from 62 for most employees.

The average benefit payable to state retirees is approximately $15,000 per year, according to the Missouri State Employees' Retirement System, which manages retirement plans, life insurance and disability benefits for 116,000 present and former state employees and their beneficiaries.

The proposal contains a separate provision that would allow as many as 19,000 former state workers to cash in their future pension payments as part of a proposal designed to shore up MOSERS.

For the former workers, the lump sum payout would mean giving up cost-of-living adjustments that come with a monthly pension check. It also would remove some of the certainty that they have in receiving a steady flow of checks as they age.

The legislation is Senate Bill 62.

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