New Retirement System for SWCD Employees in Missouri Jim Boschert October 2, 2018 NASCA Syracuse, New York

Background Information The Soil and Water Conservation Program first provided funds to the Soil and Water Conservation Districts (SWCDs) for retirement in July of 2000. Five percent (5%) of the state funded salary was available for a retirement plan for each SWCD employee. Most SWCD employees placed their funds into a 457 Plan or a SEP IRA. In 2016, the retirement benefit was increased to seven percent (7%).

Missouri Local Government Employee Retirement System (LAGERS) In the winter of 2017, the Missouri Association of Soil and Water Conservation Districts (MASWCD) started discussing LAGERS as a retirement option for SWCDs. To qualify for LAGERS a government entity must have the ability to tax. SWCDs in Missouri do not have taxing authority. In discussion with LAGERS, other government entities have had legislation passed to allow their entity to join LAGERS when they do not meet the qualifications.

Missouri Local Government Employee Retirement System (LAGERS) In the summer of 2017, the LAGERS representative went to all 8 MASWCD Area Meetings to discuss LAGERS with SWCD board members and staff to determine support for LAGERS. Three SWCDS were chosen as pilots to determine how much this retirement system could potentially cost.

SWCD Sample Studies Three SWCDs participated in the study. SWCDs were selected to represent a variety of employee demographics. The actuarial report is required for LAGERS membership. It details the cost of all benefit combinations and costs $500.

What is a Defined Benefit? Defined Contribution Defined Benefit (LAGERS) Investment Decisions Market Risk Amount of Benefit Loans Allowed Hardship Withdrawals Distribution Disability & Survivor Fees Employee LAGERS Board/Investment Professionals Employee Employer Account Balance Pre-Determined Formula Yes No Yes No Generally a Lump Sum Monthly Payment for Life No Yes Paid by Employee Netted from Investment Earnings

Multiplier Chosen by Employer Salary Length of Service Multiplier Chosen by Employer A Defined Benefit plan Provides stable, predictable, lifetime income during retirement years

$3,000 30 years L-7 1.50% A Defined Benefit plan Provides stable, predictable, lifetime income during retirement years = $1,350/ month for life = 45% of Final Average Salary

LAGERS Legislation The pilot information was presented in a general session at the 2017 MASWCD Annual Training Conference. Due to overwhelming support from the SWCD’s, the MASWCD Board of Directors decided to pursue legislation to allow SWCDs to participate in LAGERS. Legislation was passed, signed by the Governor and went into effect August 28, 2018.

Considerations for SWCD Boards Election to join LAGERS is made at the local level. Cannot stop LAGERS once started. All eligible employees must participate. State law requires that employers fully fund their actuarially required contribution. Rates are adjusted annually.

Implementation of LAGERS Atchison Worth Putnam Scotland Mercer Schuyler Clark Nodaway Harrison Gentry Sullivan Adair Holt Grundy Knox Lewis Andrew Daviess DeKalb Livingston Linn Macon Shelby Marion Buchanan Caldwell Clinton Chariton Monroe Ralls Platte Carroll Randolph Clay Ray Pike Audrain Howard Lafayette Saline Lincoln Jackson Boone Cooper Montgomery Callaway St. Charles Johnson Pettis Warren Cass Moniteau St. Louis City St. Louis Cole Henry Morgan Osage Gasconade Franklin Benton Bates Jefferson Miller Maries St. Clair Camden Hickory Phelps Crawford Washington Ste. Genevieve Vernon Pulaski St. Francois Perry Cedar Dallas Polk Laclede Dent Barton Iron Madison Dade Cape Girardeau Webster Texas Reynolds Bollinger Greene Wright Jasper Shannon Wayne Scott Lawrence Christian Carter Douglas Stoddard Newton Butler Mississippi Stone Barry Oregon Ripley Taney Ozark Howell McDonald New Madrid Pemiscot SWCDs that have requested an actuary study Dunklin

So how much does it cost? The cost of providing LAGERS is unique to each employer. A monthly contribution from the employer, and possibly the employee, funds the benefits. No up-front lump sum required.

So how much does it cost? Ste. Genevieve L-12 Regular-5Y FAS 9.30% Henry 10.10% Audrain 10.50% Howard 10.70% Holt 11.20% Shelby 11.30% Miller 11.40% St. Clair 11.50% Callaway 12.20% Cole 13.30% Ray Franklin 13.50% Lincoln 13.60% Scotland Dade 13.70% Douglas 14.30% Stone 15.20% Jefferson 15.30%

Questions??