MOSERS-backed bills would auto‑refund small balances and auto‑escalate deferred‑comp contributions

Abby Spealer, MOSERS executive director, briefed the committee on two pieces of 2026 legislation described on MOSERS’ slides as “Senate Bill 15 57 and 10 54,” which she said were filed by Senator Henderson and Senator Black.

Spealer said one bill would automatically refund employee contributions for terminated, nonvested members who have balances below a de‑minimis threshold (described in the presentation as $1,000, noting that is the IRS de‑minimis threshold in the draft). She told lawmakers roughly 39,000 of the plan’s roughly 57,000 inactive members are term nonvested, and about 23,000 of those have balances under $1,000; roughly 70% of that subgroup have balances under $500 with only a month or two of service.

On the refund mechanics, MOSERS staff told the committee the draft would make the payouts automatic; if a person later returns to MOSERS‑covered employment they could redeposit the refunded amount under existing refund rules, which MOSERS said would keep the treatment status‑quo other than making the refund automatic.

The second bill Mosers presented would add an automatic escalation feature to the state deferred compensation plan: employees currently auto‑enrolled at 1% would have their deferral increase by 0.5 percentage points each year until reaching 10% over a typical 20‑year career, with the ability for members to opt out under the draft language.

Lawmakers asked whether automatic refunds could impose costs on returning employees; MOSERS said the plan would follow current refund and redeposit rules and that the draft contemplates statutory interest (MOSERS noted "I think the statute says plus interest, but don't quote me on that"). MOSERS compared the proposals to practices in other states, naming Kansas, Indiana and Wyoming as examples where similar measures exist.

MOSERS staff framed the bills as operationally efficient and member‑centric: returning small balances to former employees reduces recordkeeping and returns money sooner, while automatic escalation aims to increase long‑term retirement savings among deferred‑comp participants. The committee asked MOSERS to provide statutory language and further implementation details for legislative review.