The trustees of Missouri’s largest state employee retirement system voted Thursday to prohibit the use of pension funds for political contributions.
The Missouri State Employees Retirement System board, responding to donations made this year by two smaller systems, made it the responsibility of the executive director to make sure money doesn’t flow into campaigns for ballot measures or candidates.
“Missouri pension systems funds should never be used to make contributions to political campaigns,” said state Rep. Dirk Deaton, a Republican from Noel who is one of four legislators on the 11-member board.
Deaton also said he intends to introduce legislation for the upcoming session to ban political contributions by all pension systems. The legislation, he said, will mirror the policy adopted Thursday by the trustees and be similar to the law barring political subdivisions from using public money for political purposes.
In the policy change, the trustees made it the responsibility of the system executive director to ensure “no contribution or expenditure of system funds shall be made by MOSERS to advocate, support, or oppose the passage or defeat of any ballot measure or the nomination or election of any candidate for public office, or to direct any System funds to, or pay any debts or obligations of, any committee supporting or opposing such ballot measures or candidates.”
The MOSERS fund pays pension benefits to 56,205 retirees and beneficiaries and covers state employees in most agencies and state universities. It receives approximately $700 million in contributions annually from the state and employees to support those benefits.
At the end of fiscal 2023, the system had $8.7 billion in net assets.
The fund has never made political contributions and the policy means it won’t in the future, Deaton said.
“State employees covered by MOSERS can be confident their retirement funds will be used solely for their benefit and meeting their pension obligations,” he said.
The vote is a reaction to contributions made this year by the Missouri Sheriffs’ Retirement System and Prosecuting Attorneys and Circuit Attorneys Retirement System. On Oct. 2, the sheriffs system gave $30,000 to support passage of Amendment 6, which would have imposed fees on criminal cases to fund pensions for sheriffs and prosecutors. The prosecutors system on Oct. 8 gave $50,000 to the campaign.
Voters rejected Amendment 6 by a margin of 61% to 39%.
If retirement funds became involved regularly in politics, the donations could be larger than any seen in state history.
MOSERS covers most state employees but it is not the only system for state workers nor is it the largest retirement fund operated by the state.
The fund for Missouri Department of Transportation workers and Missouri State Highway Patrol troopers has $3.7 billion in assets. Education employees are covered by a fund,\ known as PSRS/PEERS, which held $55 billion in assets on June 30, 2023.
And many local government employees are enrolled in LAGERS, which has about $11 billion in assets.
The Independent sought reaction to the MOSERS action and the plans for legislation from executive staff at all three funds but did not receive an immediate response.
Amendment 6 would have allowed collection of a $3 fee per case where a guilty verdict or plea is reached in criminal cases to fund sheriff’s pensions and $4 per case to fund the pensions for prosecutors.
The fees had been in place for years but in 2021, the Missouri Supreme Court ruled that they were an unconstitutional bar to the courts, which are to be open to all and where “justice shall be administered without sale, denial or delay.”
During calendar year 2023, without the fees, the sheriffs fund received $89,502 in contributions, had $38.4 million in assets and had lost $15 million in value over the previous two years.
To shore up its finances, lawmakers this year appropriated $5 million in general revenue to the sheriffs fund
The prosecutors fund does not have a website where its financial statements can be found.
Melissa Lorts, the treasurer of the Amendment 6 campaign committee, is also executive director of the sheriffs’ retirement system.
She did not respond to a request for comment. During the campaign, she said the donations were a responsible use of the pension funds.
“I have a legal opinion and these are not public dollars,” Lorts said. “I’m not a political subdivision and they’re not public dollars.”
Other lawmakers also raised questions about the donations.
This story was originally published by the Missouri Independent, a part of the States Newsroom.
