[Posted on 03/02/2015 at 8:39 AM]
MOSERS has received questions on the temporary benefit through our Website Feedback recently, and we also answer many on our Rumor Central blog. Some of these indicate there is some confusion about the MOSERS temporary benefit, early social security retirement, and a MCHCP healthcare subsidy, so let’s break it down:
MOSERS Temporary Benefit Explanation
The Missouri State Employees’ Plan 2000 (MSEP 2000), including the MSEP 2011, provides a temporary benefit to eligible general state employees at retirement. The formula for calculating the temporary benefit is:
Credited Service x Final Average Pay x .008
To take advantage of this provision, you must:
- Become eligible for retirement under the “Rule of 80” in the MSEP 2000 (or “Rule of 90” for MSEP 2011)
- Be younger than age 62.
- Retire under the MSEP 2000 or MSEP 2011.
The “Rule of 80” for MSEP 2000 means you are at least age 48 and your age plus service equals 80 or more. For MSEP 2011, the “Rule of 90” requires you to be at least age 55 with your age plus your service equaling 90 or more.
The temporary benefit and any cost-of-living allowances (COLAs) earned on that amount stop the month you turn 62. If a member is eligible for the base benefit PLUS the temporary benefit, the temporary benefit ends at age 62 but the base benefit continues for life, as long as the member does not return to work with the state in a MOSERS benefit-eligible position.
The temporary benefit is not available in the MSEP and would not apply if you retire under MSEP 2000 or MSEP 2011 and are older than age 62 when you retire. If you are unsure which plan you are in, see Which Plan Am I In? or contact a MOSERS benefit counselor.
Early Social Security Retirement
Social security offers early retirement benefits; however, you must be age 62 for a full month before benefits can begin. Your benefit is permanently reduced a fraction of a percent for each month before your full retirement age. The reduction in your benefit amount will depend on the year you were born and when you retire. We recommend that you contact your local social security office, or call (800) 772-1213, at least 6 months before you plan to start receiving benefits. Information may also be found on their website.
The connection to MOSERS:
The MOSERS temporary benefit became law on 7/1/2000 and was designed to serve as a bridge between your MOSERS retirement and your eligibility for early social security benefits. At age 62 the temporary benefit stops. It is a personal decision, with pros and cons on both sides, to take early/reduced social benefits at age 62 or wait until you are eligible for full social security benefits. We encourage you to talk with a financial advisor or staff at the Social Security Administration to help you decide which is best for you individually.
MCHCP Health Care Subsidy
The contribution toward your health care premium is based on your years of service with the state at retirement. It is calculated by using the number of full years of service multiplied by 2.5 percent. The maximum contribution cannot exceed 65 percent. So, if a person worked for 12 years, his/her state subsidy would be 12 x .025 = 30% of total premium; 20 years = 50% of total premium, etc. However, since the current maximum is 65% anything over 26 years doesn’t add anything to the state’s contribution because 26 x .025 = 65%. If a person works beyond 26 years, he/she will still only get a 65% contribution toward his/her health care.
The Missouri Consolidated Health Care Plan (MCHCP) administers the medical, dental, and vision coverage for eligible state employees. Specific questions regarding medical benefits should be directed to MCHCP at (800) 487-0771.They also have a calculator on their website that will estimate monthly premiums for retirees, figuring in their years of service.
We receive many questions about the temporary benefit on the Rumor Central blog, so we invite you to click on Categories at the top of Rumor Central, then Temporary Benefit and view our previous questions and answers.
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