Matt Blunt Governor State of Missouri Michael N. Keathley OFFICE OF ADMINISTRATION Thomas J. Sadowski Commissioner Division of Accounting Director 570 Truman Building, 301 West High Street Post Office Box 809 Jefferson City, Missouri 65102 (573) 751-2971 INTERNET: http://www.oa.mo.gov/acct E-MAIL: [email protected] January 16, 2008 State Library P.O. Box 387 Jefferson City, MO 65102-0387 Subject: Annual Report of the Old Age, Survivors, Disability and Health Insurance Program This report presents the status of the Old Age, Survivors, Disability and Health Insurance Program at December 31, 2007, as required by Section 105.440 RSMo. Information concerning both the State of Missouri and its participating political subdivisions is presented. This report is being furnished in accordance with Section 181.100 (4) RSMo. Sincerely, Thomas Sadowski, CGFM, CPA State Social Security Administrator Enclosure ANNUAL REPORT of the Old Age, Survivors, Disability and Health Insurance Program For Calendar Year Ending December 31, 2007 Office of Administration Division of Accounting Thomas Sadowski, Director January 16, 2008 Matt Blunt Governor State of Missouri Michael N. Keathley OFFICE OF ADMINISTRATION Thomas J. Sadowski Commissioner Division of Accounting Director 570 Truman Building, 301 West High Street Post Office Box 809 Jefferson City, Missouri 65102 (573) 751-2971 INTERNET: http://www.oa.mo.gov/acct E-MAIL: [email protected] January 16, 2008 To the Members of the General Assembly State of Missouri This report presents the status of the Old Age, Survivors, Disability, and Health Insurance Program at December 31, 2007, as required by Section 105.440, RSMo. Information concerning both the State of Missouri and its participating political subdivisions is presented. We will be glad to provide additional information upon request. Sincerely, Thomas Sadowski, CGFM, CPA State Social Security Administrator Table of Contents Introduction.............................................................................................. 1 Federal-State Agreement.................................................................... 1 State Agency for Social Security........................................................ 1 Coverage............................................................................................. 2 Rate and Wage Base Table ...................................................................... 3&4 Employer and Employee Contribution Rate ............................................ 4 Cash Balance Statement – OASDHI Trustee Fund Account ................... 5 Summary of State Coverage Agreements ................................................ 5 Introduction Federal-State Agreement P rior to 1951, state and local governmental employees could not be covered by the Old Age, Survivors, Disability and Health Insurance of the Federal Social Security Administration. Passage of the 1950 Amendments to the Social Security Act allowed certain groups of state and local governmental employees’ social security coverage on a contractual basis. The Social Security Amendments of 1954 provided more extensive coverage by permitting coverage of employees in positions under an existing state or local government retirement system effective January 1, 1955 through referendum procedures. Coverage of state and local governmental employees differ basically from private industry and the self-employed in that participation in the social security program is extended pursuant to a voluntary contractual agreement entered into between individual states and the Commissioner of Social Security (formerly Secretary of Health and Human Services). Missouri's participation in the Old Age, Survivors, Disability and Health Insurance Program (OASDHI) was authorized by the 66th General Assembly with the passage of Senate Bill 3 (Section 105.300 through 105.440, Missouri Revised Statutes). At one time, employees of political subdivisions could obtain social security coverage only under the terms of the State's Agreement. With the passage of Public Law 101-508 (The Omnibus Reconciliation Act (OBRA) of 1990), employees of a state or political subdivisions, including instrumentalities, who are not members of their employer's retirement system or whose services were not already covered under the State's Agreement became covered under mandate by Social Security on July 1, 1991. State Agency for Social Security S ection 105.300 (11), RSMo 1986 designates the Office of Administration, Division of Accounting as the “State Agency” for the Social Security Administration. The OASDHI (Social Security) Unit of the Division of Accounting has been delegated the administrative responsibility which includes the following duties. 1. Depositing social security and Medicare contributions of state employees to OASDHI Trustee Fund Account and making proper remittance by specified due dates to the Internal Revenue Service. 2. Providing coverage information and acting as a liaison office between all state and local coverage groups and the Social Security Administration 3. Processing social security coverage applications of local political entities. The handling of benefit claims and payments is not a function of the OASDHI Unit but is handled by the district social security office. 1 Coverage Th e Missouri social security coverage agreement with the Commissioner of Social Security (formerly Secretary of Health and Human Services) provided absolute coverage. An absolute coverage group for coverage purposes is a permanent grouping of employees whose positions are not under a state or local retirement system when coverage is initially established. This included elective and appointive officers and employees of the state, members of the General Assembly, elective and appointive officers and employees of any covered instrumentality of either the state or such political subdivisions, and employees of a group of two or more covered political subdivisions of the state organized to perform common functions or services. Since 1951, the original Federal-State Agreement has been modified to exclude the following classes of employees: 1. As employees of the state, motor vehicle license agents, appointed by the Director, Department of Revenue who are compensated solely on a fee basis - effective 1/1/69. 2. Election officials or election workers earning less than $1,300.00 annually – effective 1/1/2006 through 12/31/2007. 3. Student employment at a public school, college or university while enrolled and regularly attending classes - effective 4/1/74. 4. Services compensated solely on a fee basis in positions of Township Collector, Township Ex-officio Assessor, County Public Administrator, and County Surveyor - effective 1/1/78. In addition to modification exclusions mentioned above, the Social Security Act provides for the automatic exclusion of the following public services from coverage: 1. Services of employees who were hired to relieve them from unemployment. 2. Services performed in a hospital, home or other institution by a patient or inmate. 3. Covered transportation service (as determined under Section 210(k) of the Social Security Act, as amended) 4. Services performed by an individual as an employee serving on a temporary basis in connection with an unforeseen disaster, e.g., fire, storm, snow, earthquake, flood, or other similar emergency 5. Others. In addition, present federal law excludes the following from social security coverage: a. Federal Retirement System - State or local governmental employees in positions subject to the Federal Civil Service Retirement Act prior to January 1, 1984. b. Clergymen and Religious Orders - The wages of employees of the state or of local governments who are members of a religious order are excluded where a member of an order will perform services pursuant to a contractual arrangement between the order and a third party. c. Foreign National - Services performed by nonresident alien temporarily in the United States as a nonimmigrant under subparagraph "F", "J", "M", or "Q" of Section 101(a)(15) of the Immigration and Nationality Act if the services are performed to carry out the purpose for which admitted to the United States. 2 Rate and Wage Base Table Maximum Combined Employer and Year Contribution Rate Wage Base Employee Percentage Contributions 1951-1953 3.00 $ 3,600 $ 108.00 1954 4.00 3,600 144.00 1955-1956 4.00 4,200 168.00 1957-1958 4.50 4,200 189.00 1959 5.00 4,800 240.00 1960-1961 6.00 4,800 288.00 1962 6.25 4,800 300.00 1963-1965 7.25 4,900 348.00 1966 8.40 6,600 554.40 1967 8.80 6,600 580.00 1968 8.80 7,800 686.40 1969-1970 9.60 7,800 748.80 1971 10.40 7,800 811.20 1972 10.40 9,000 936.00 1973 11.70 10,800 1,236.60 1974 11.70 13,200 1,544.40 1975 11.70 14,100 1,649.70 1976 11.70 15,300 1,790.10 1977 11.70 16,500 1,930.50 1978 12.10 17,700 2,141.70 1979 12.26 22,900 2,807.54 1980 12.26 25,900 3,175.34 1981 13.30 29,700 3,950.10 1982 13.40 32,400 4,341.60 1983 13.40 35,700 4,783.80 1984 14.00 37,800 5,292.00 1985 14.10 39,600 5,583.60 1986 14.30 43,800 6,006.00 1987 14.30 43,800 6,263.40 1988 15.02 45,000 6,759.00 1989 15.02 48,000 7,209.60 1990 15.30 51,300 7,848.90 1991 (Social Security) 12.40 53,400 6,621.60 1991 (Medicare) 2.90 125,000 3,625.00 1992 (Social Security) 12.40 55,500 6,882.00 1992 (Medicare) 2.90 130,200 3,775.80 1993 (Social Security) 12.40 57,600 7,142.40 1993 (Medicare) 2.90 135,000 3,915.00 1994 (Social Security) 12.40 60,600 7,514.40 1994 (Medicare) 2.90 All Wages 1995 (Social Security) 12.40 61,200 7,588.80 1995 (Medicare) 2.90 All Wages 1996 (Social Security) 12.40 62,700 7,774.80 1996 (Medicare) 2.90 All Wages 1997 (Social Security) 12.40 65,400 8,109.60 1997 (Medicare) 2.90 All Wages 1998 (Social Security) 12.40 68,400 8,481.60 1998 (Medicare) 2.90 All Wages Rate and Wage Base Table continued on next page . . . 3 Rate and Wage Base Table, continued… Maximum Combined Employer and Year Contribution Rate Wage Base Employee Percentage Contributions 1999 (Social Security) 12.40 72,600 9,002.40 1999 (Medicare 2.90 All Wages 2000 (Social Security) 12.40 76,200 9,448.80 2000 (Medicare 2.90 All Wages 2001 (Social Security) 12.40 80,400 9,969.60 2001 (Medicare) 2.90 All Wages 2002 (Social Security) 12.40 84,900 10,527.60 2002 (Medicare) 2.90 All Wages 2003 (Social Security) 12.40 87,000 10,788.00 2003 (Medicare) 2.90 All Wages 2004 (Social Security) 12.40 87,900 10,899.60 2004 (Medicare) 2.90 All Wages 2005 (Social Security) 12.40 90,000 11,160.00 2005 (Medicare) 2.90 All Wages 2006 (Social Security) 12.40 94,200 11,680.80 2006 (Medicare) 2.90 All Wages 2007 (Social Security) 12.40 97,500 12,090.00 2007 (Medicare) 2.90 All Wages *Wage base will increase according to average wage level increase **Subject to rate and wage base Employer and Employee Contribution Rate OASI DI HI Year (Retirement) (Disability) (Medicare) Total 1990-1999 5.60% .60% 1.45% 7.65% 2000 and after 5.49% .71% 1.45% 7.65% 4 Cash Balance Statement OASDHI Trustee Fund Account January 1, 2007 to December 31, 2007 (Established Under Section 105.390, RSMo 1986) Balance – January 1, 2007 $ 3,880.70 Receipts: Contributions 298,890,878.66 Sub-Total $ 298,894,759.36 Disbursements: To Internal Revenue Service $ 298,881,202.83 Refunds to Employers & Employees 9,827.40 Total Disbursements 298,891,030.23 Balance – December 31, 2007 $ 3,729.13 Summary of State Coverage Agreements Number of Class of Entities Instrumentality 15 State Units 114 Counties 164 Townships 537 Cities 536 School Districts 133 Road Districts 111 Extension Councils 137 Water & Sewer Districts (Utilities) 97 Housing Authorities 58 Libraries 65 Ambulance Districts 49 Fire Protection Districts 38 Hospitals 71 Soil & Water Districts 30 Nursing Homes 14 Regional Planning Commissions 11 Junior Colleges 60 County Health Centers 65 Miscellaneous 2,305 5