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Proposed Board Rule

Terminated-Vested Member Buyout Program

[Posted on 06/22/2017 at 2:56 PM]

Board Rules 2-18 and 3-17 were adopted by the Board on June 22, 2017 and shall take effect on August 28, 2017, contingent upon the Governor’s action on SB 62. The Governor has until July 14, 2017 to take action on the bill (sign it, veto it, or allow it to become law without his signature).

Board Rules 2-18 and 3-17 establish the Terminated-Vested Member Buyout Program (the “Buyout Program”) in accordance with sections 104.1063 and 104.1092 RSMo.

You may submit written comments regarding these rules to MOSERS' chief counsel at any time prior to July 22, 2017. The Board will consider any comments received and has the authority to take additional action as it deems appropriate regarding these rules.

Eligibility

  1. Except as otherwise provided under this board rule, a member of the closed plan or the year 2000 plan may elect to participate in the Buyout Program if the member:
    1. has not been employed at any time after June 30, 2017 in any position covered by any retirement plan administered under Chapters 104, 287, and 476, RSMo;
    2. is eligible for a deferred retirement annuity from MOSERS under RSMo Chapter 104;
    3. would not have reached normal retirement age and would not be eligible to receive a normal retirement annuity from MOSERS under Chapter 104, RSMo, before December 1, 2017;
    4. files a complete application with MOSERS by November 30, 2017 to make a one-time election to receive a lump sum buyout of all of the member’s deferred annuities that such member is eligible for under Chapter 104, RSMo, as provided in the Buyout Program.
  2. Notwithstanding section 1 of this board rule, a member may not participate in the Buyout Program if the member:
    1. is eligible for a refund of contributions under section 104.1091, RSMo, and the amount of the refund would be greater than the amount of the buyout payment otherwise payable under the Buyout Program;
    2. is eligible for a present value payment under section 104.335.6, RSMo;
    3. is subject to a Division of Benefit Order (“DBO”) issued by a court under sections 104.312 or 104.1051, RSMo, and the system has received notice of the DBO before the system issues the buyout payment;
    4. is married at the time of the election to participate in the Buyout Program unless the member’s spouse consents in writing to the election;
    5. dies and the system receives timely notice of the member’s death before the system issues the buyout payment;
    6. becomes employed in any position covered by any retirement plan administered under Chapters 104, 287, and 476, RSMo, and the system has received timely notice of such employment before the system issues the buyout payment; or
    7. is receiving a long-term disability benefit from MOSERS.
  3. A member may rescind an election in writing made under section 1 of this board rule if such rescission is received by MOSERS no later than November 30, 2017.

Payment Calculation

  1. The buyout payment made under the Buyout Program shall be equal to 60 percent of the present value of the member’s deferred normal retirement annuity as determined under this board rule.
  2. The discount rate used to calculate the present value of the member’s deferred normal retirement annuity shall be 7.50 percent. The assumption for cost of living adjustments used to calculate the present value of the member’s deferred normal retirement annuity shall be 4.00% compounded until the 65% cap is reached, then at 2.00% compounded for life for members of the closed plan. The assumption for cost of living adjustments used to calculate the present value of the member’s deferred normal retirement annuity shall be 2.00% compounded for life for members of the year 2000 plan. Present value is based on assumed life expectancy.
  3. The present value of the member’s deferred normal retirement annuity shall be determined as of October 1, 2017, regardless of when the member makes an election to participate in the Buyout Program or the system issues the buyout payment to the member.
  4. The system’s actuary shall determine the present value of the member’s deferred normal retirement annuity based on the member’s expected eligibility date for a normal retirement annuity.
  5. For any member who is covered by the closed plan and is eligible to elect coverage under the year 2000 plan, the member shall be deemed to have elected coverage in the plan that results in the greater buyout payment for the member.
  6. The system shall provide each member who is eligible to participate in the Buyout Program with: (a) an estimate comparing the amount of the projected buyout payment under the Buyout Program with the monthly amount of the member’s projected normal retirement annuity; and (b) a description of the actuarial assumptions used in the calculation of the present value of the member’s deferred normal retirement annuity under the Buyout Program.


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MOSERS
Missouri State Employees' Retirement System
Address: 907 Wildwood Dr., Jefferson City, MO 65102
https://www.mosers.org/images/mosers-logo-bg-375-280.jpg Phone: 800.827.1063 URL: Email: mosers@mosers.org Founded On: September 1, 1957