This article first appeared in the St. Louis Beacon, April 20, 2010 - State Sen. Jason Crowell, R-Cape Girardeau, won final Senate approval Tuesday of his bill (SB714) that would revamp the state's pension system for most of its employees and set up a new public board to handle the pension investments for state and highway employees.
He also expected to hold an informal informational meeting with members of a state House panel to explain the details of the measure. The session, said Crowell, is at the House's request.
Crowell's unusual session with the other legislative chamber -- and his circulation of a self-described "white paper'' laying out the proposed changes in detail -- are aimed, in part, at dispelling rumors about his plan that he says are "wholly without merit."
Most of the debate isn't about the bill's primary objectives, which would reduce the state's retirement benefits for its workers and require state employees to contribute 4 percent of their pay to help pay for their pensions. State Senate President Pro Tem Charlie Shields, a Republican, and Gov. Jay Nixon, a Democrat, both say the state can't afford to continue its current pension setup, where the employees make no financial contribution.
Rather, Crowell's most talked-about proposal has to do with the creation of a new board to handle investments for two of the state's pension systems: the Missouri State Employees Pension System (MOSERS) and the Missouri Department of Transportation and Patrol Employees Pension Systems (MPERS).
Crowell disputes some critics' private assertions that the proposed board is an attempt by MOSERS' staff to expand their clout and control over the pension funds' investment portfolios.
"This idea is being advanced by me,'' Crowell said, to improve the investment return at MPERS by using the expertise of MOSERS' investments operation, headed by Rick Dahl. IF MPERS had had the same rate of investment performance, says Crowell, it would have accumulated $175 million more in its pension coffers just within the past five years.
Crowell contends that a combined pension-investment operation also would save the two agencies at least $3 million by reducing duplication of investment staff and consultants. In fact, Crowell say he was amenable to numerous changes in his orginal bill because his chief aim is to get the measure passed, and save the state money.
Crowell says the urgency of the issue is that MPERS' pension system is underfunded because, since the 1980s, the transportation agency has poured more money into road-building, which prompted less to go into its employee retirement.
He says his proposed changes have nothing to do with the fact that Dahl's sister, Susan Dahl, is the chief executive for MPERS.
State Treasurer Clint Zweifel, a Democrat who sits on MOSERS' board, agrees with that point and dismisses any speculation of staff influence on Crowell's bill. However, Zweifel added in an interview that he's not sure why a new MOSERS-MPERS investment board is needed.
But Zweifel said his chief concern was that the new board had to be a public entity, and not a private firm, as Crowell had initially proposed.
State Sen. Tim Green, D-Spanish Lake and also a member of the MOSERS board, said he also had made his support contingent on making the new board a public body. Green said it was important for any state investment board to be "transparent'' so the public can monitor how the money is being handled.
That said, Green added that he is receptive to many aspects of Crowell's revised bill -- including the provision that would allow local governments' pension boards to have their investments handled by the new state board as well. Green has already heard of a St. Louis area fire district that may be interested.
The most notable change Crowell made is how the new entity's board members would be selected.
The bill now calls for the seven-member board to be made up of the two executives of MOSERS and MPERS, the commissioner of the state's Office of Administration, and four people selected by the governor and confirmed by the state Senate.
The governor would select those board members from larger slates assembled by the MOSERS and MPERS chiefs. However, the governor can reject the slates and ask for new ones.
Once confirmed by the Senate, the board members would serve four years each, except for the first batch, where they would serve staggered terms of one, two, three and four years.
The latest version of the bill also bars any member of the Legislature from serving on the new investment board -- or working as a staff member of the new body -- for five years after leaving office. The bill also bars any former member of the board from doing business with the investment body for two years.
The upshot, says Crowell, are the "toughest conflict of interest provisions'' in state government.
He asserts that some criticism, generally posed in private or behind the scenes, is being leveled by allies of other pension systems for public-school employees and local governments. They are upset about another provision of the bill that allows the state auditor to check the systems' books periodically. Now, the auditor has no such power.
The new investment board, he noted, would also be subject to regular fiscal and performance probes by the state auditor.
Crowell emphasized that some of the changes -- especially the selection procedure for the investment board's members -- had been sought by Nixon's office. Crowell said he has regularly consulted with Nixon's staff.
Even so, a Nixon spokesman declined to take a position Monday on the proposed new investment board. "We have looked at the legislation ... and will review it as it continues through the legislative process,'' said communications director Jack Cardetti.
Nixon's chief interest, Cardetti added, is in revamping the pension benefits for all new state workers.
The state Senate's proposed budget predicts that such benefit changes would save the state at least $10 million during the next fiscal year, which begins July 1.
The state House bill, noted Crowell, doesn't include any such savings because the House has yet to take any action on the proposed pension changes, Which is why he has canceled a Senate hearing on an unrelated issue so he can brief members of the House committee overseeing public-employee pension systems.
