LAWMAKERS TO BENEFIT FROM NEW PENSION PLAN

A new pension plan will put more money in state lawmakers' pockets.

Current members of the General Assembly, as well as retired House and Senate members, have a choice. They can choose the new plan or stick with the old one.

Future lawmakers will be covered by the new pension plan. The plan, approved during the 1999 legislative session, takes effect July 1.

During the waning days of that session, lawmakers settled for a revised pension plan, scrapping a measure that would have given a hefty pension hike to the longest-serving legislators. Gov. Mel Carnahan had threatened to veto the measure that would have tripled pensions for the most veteran lawmakers.

State Rep. David Schwab, R-Jackson, is among many lawmakers who will be forced out of office in 2002 by term limits.

He said he voted against changing the existing pension.

But Schwab, who will have served 14 years when his final term ends, said he and other lawmakers likely would switch to the new plan.

"It is better than the old plan," said the 58-year-old Schwab. But he insisted it isn't a gold mine. "You are not going to get rich."

Pension payments to retired lawmakers begin at age 55 under both pension plans. Under the existing plan, lawmakers must serve a minimum of six years to receive the state pension.

The pension is calculated on the basis of $150 a month for every two-year assembly. A lawmaker who served 20 years would be credited with 10 assemblies. That would amount to a pension of $1,500 a month.

Retired lawmakers would also receive annual cost of living increases of about 4 percent a year.

Under the new plan, retired lawmakers' pensions would be based on the salary of House and Senate members as of the date when their retirement payments kick in.

Retired lawmakers would collect 1/24 of the salary for each year of service, said Gary Findlay, executive director of the Missouri State Employees Retirement System or MOSERS.

The system provides retirement benefits for state employees, as well as the pension payments for lawmakers. It is funded with state tax dollars.

Missouri has 210 retired lawmakers currently receiving pensions.

Like the old plan, the new pension plan includes a cost of living increase. A retired lawmaker annually would receive the same cost of living increase as an active lawmaker. Such cost-of-living increases are approved by the Legislature as part of the annual budget process.

Lawmakers would only get credit for a maximum of 24 years in office even if they served a longer period of time.

With 14 years of service, Schwab would receive about 58 percent of the salary of an active lawmaker when he retires.

State Rep. Mary Kasten, R-Cape Girardeau, is retiring this year after 18 years in the Missouri House.

In retirement, she will make 75 percent of an active lawmaker's salary or about $23,000 a year under the new plan.

Under the old pension plan, she would have received $16,200 a year.

The 71-year-old Kasten said lawmakers shouldn't receive huge pensions. The new pension plan isn't extravagant, she said.

"It is a good one, but it isn't lush," she said.

Lawmakers, said Kasten, should receive some retirement benefit for their years of service.

But it's not just the current crop of lawmakers who will benefit from the new pension plan.

Findlay said future lawmakers, restricted by term limits, will benefit too.

Under term limits, lawmakers are limited to eight years in the House and eight years in the Senate.

At most, a lawmaker could serve only 16 years in the Legislature.

With 16 years of service, a retired lawmaker would receive two-thirds of the salary of an active lawmaker. Calculated on the basis of the current legislative salary, the pension amounts to over $20,000 a year or about $5,700 more than would be the case with the old plan.

Many lawmakers will end up serving only eight years, Findlay said.

A lawmaker who served eight years in the Legislature would receive $7,200 a year under the old pension plan compared to more than $10,000 a year under the new one.