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May 14, 2018, 10:39 AM By MOSERS
Are Public Pension benefits taxable if the MOSER retiree now resides in a state other than Missouri? I understand Missouri does not tax MOSER pensions.
MOSERS withholds state taxes only for Missouri residents. If you aren’t a Missouri resident in retirement, contact the appropriate state and local tax authorities to determine the taxability of your MOSERS benefit. Pension benefits are subject to federal taxes.
May 9, 2018, 12:18 PM By MOSERS
I have recently read articles that indicate a decline in MOSERS viability, ie. their ability to cover promised benefits into the future. I am also concerned about the increased incentives for early retirement. So I wonder how much I should be concerned.
There have been no recent incentives for early retirement for active state employees. Any such incentives would require legislative action.
As of June 30, 2017, retirement benefits for general state employees are 67.5% pre-funded. Money to pay retirement benefits comes from:
- Employer contributions
- Employee contributions (if first employed on or after 1/1/2011), and from
- Investment returns.
Over that past 20 years, 61% of the assets in the MOSERS Trust Fund have come from investment returns. Beginning in FY17, the MOSERS Board adopted a funding policy to gradually lower MOSERS’ investment return assumption. This more accurately reflects capital market expectations and confirms the Board’s commitment to sound financial practices. (In other words, the board decided that we should expect less income from investments. So, the income that we are not expecting from investment income will have to come from the employer/the state.) It results in higher annual employer contribution requirements (and a lowered funded status) in the short-term. However, it is the board’s expectation that these changes will strengthen MOSERS’ financial position and will ultimately enhance the retirement security of our members.
May 9, 2018, 9:24 AM By MOSERS
I have heard that at the time of retirement that you can use your AL balance to pay for medical coverage for up to a year. Is this true and if so how does it work?Yes, this is true. Check with your HR staff and MCHCP for specific information as it relates to you, but here is some general information we received from MCHCP on the topic: Your employer’s payout for your unused annual leave/vacation can be used to pay your medical insurance premiums during the remainder of the year in which you retire. When you fill out your MCHCP Retiree Enrollment Form, you may elect to deduct your premiums using your one-time lump-sum annual leave payout as long as you did not opt out of the Cafeteria Plan’s premium only category and current premiums are deducted pre-tax. Depending on how many hours of annual leave you have, this can be a sizeable amount and can result in tax savings!
After you send the form in, MCHCP will contact your department’s payroll representative to verify your lump-sum payout amount. You may only pre-pay for the remaining premiums in the year you have retired. For example, if you retire in July, you may potentially pay for your August-December premiums with your unused annual leave payout.
For more information about your particular situation, please contact MCHCP at (800) 487-0771.
May 9, 2018, 9:18 AM By MOSERS
I know any sick leave balance you have at retirement can go toward years served. I also know that if you have 26 years of service with the state at retirement, the state will pay 65% of your insurance premium. I have approximately 1700 hours of sick leave. Will that time count toward the years of service for the 65% reduction of my insurance premiums?
Yes. You will get one month of credited service for each 168 hours of unused sick leave you have at retirement. If you have 1700 hours of unused sick leave, you will get 10 additional months of credited service. (This service does not count toward eligibility for retirement but will increase the amount of your pension benefit payments.) MOSERS will report your actual service plus any additional service for unused sick leave to MCHCP. Note below, that their calculation for the subsidy is based on FULL years of service.
Here is additional information from the MCHCP website:
The retiree premium is based on years of service with the state at retirement. The state contribution is calculated by using the number of full years of service as reported by MOSERS or another retirement system multiplied by 2.5 percent. The contribution for non-Medicare retirees is based on the PPO 600 Plan premium with the tobacco-free incentive and wellness premium. The contribution for Medicare retirees is based on the PPO 600 Plan total premium. The maximum state contribution cannot exceed 65 percent.
Employees whose premiums are collected pre-tax through the cafeteria plan have the opportunity to pre-pay premiums pre-tax as a retiree. Prepaid premiums may only be paid within the same calendar year*. To prepay, retirees must submit their enrollment request at least 31 days prior to their retirement date. The first month’s premium for retiree coverage will be divided between the last two active paychecks. Additional prepaid premiums may be collected from the retiree’s last two active paychecks and/or lump sum vacation/compensatory time payroll. Verify this payroll amount with the HR/Payroll personnel to determine how many months of retiree premiums can be prepaid.
* Employees with a retirement date of Dec. 1 cannot prepay premiums, since future premiums would be for a different plan year. Employees with a retirement date of Jan. 1 can only prepay premiums using funds from their final active payroll (usually Jan. 15) and/or their vacation and compensatory time payroll.
May 9, 2018, 9:14 AM By MOSERS
If MOSERS benefit is a “public” pension and, therefore, is not considered a salary or wage why would I have to pay taxes on the backdrop? Isn't the backdrop considered part of an employee's pension?
Your MOSERS benefit is a public pension and, therefore, is not considered a salary or wage. It does not count towards the annual earnings limit for social security. Your BackDROP payment, however, is considered taxable income for the year in which you receive the payment unless you roll it over to a traditional IRA or another eligible employer plan, such as MO Deferred Comp. Depending upon your age, there could also be an additional 10% IRS penalty if you choose the cash payment.
When you retire with MOSERS, you will be asked if you want to elect BackDROP* (if eligible), and, if so, how you want to receive that distribution: cash option, rollover option, or combination cash and rollover option. State employees eligible to receive a lump-sum BackDROP payment get this payment in addition to a lifetime monthly benefit payment and can choose to roll the lump sum into the MO Deferred Comp Plan at retirement. This option is available to all state of Missouri employees, even if they have never participated in the deferred compensation plan. A popular reason to roll the lump-sum payment into the deferred compensation plan is that it allows employees to defer taxes on the payment until those assets are distributed in retirement. There is a helpful publication on MO Deferred Comp’s website called Thinking About the BackDROP?
We suggest you speak to a tax professional or financial advisor for advice specific to your situation and to discuss all of your options at retirement. For more information about Social Security, the Social Security Administration website is www.ssa.gov or call them toll-free at (800) 772-1213.
May 1, 2018, 3:03 PM By MOSERS
How would Senate Bill 1007 impact state merit employees who are eligible for retirement (past 80 and out) but have not yet retired?
SB 1007 does not currently contain any changes to any MOSERS benefit provisions. It modifies and repeals several provisions relating to the State Personnel Law (SPL), commonly referred to as the merit system. In order for those proposed changes to go into effect, the House must also pass the legislation and the Governor must approve it.
We will monitor any legislation affecting MOSERS and inform our members of any changes that become law. The 2018 legislative session ends on May 18th. You can visit our Legislation page for more information.
May 1, 2018, 2:10 PM By MOSERS
What is the status of the MOSERS fund? My wife heard on the radio that it is in fiscal trouble. Could you tell me the fund status or direct me to a site where I can review it's status.
As of June 30, 2017, retirement benefits for general state employees are 67.5% pre-funded. This information is contained in our Comprehensive Annual Financial Report. It was also included in our Summary Annual Financial Report, an insert in the fall/winter 2017 issue of our newsletters.
Money to pay retirement benefits comes from employer contributions, employee contributions (if first employed on or after 1/1/2011), and from investment returns. Over that past 20 years, 61% of the assets in the MOSERS Trust Fund have come from investment returns. Beginning in FY17, the MOSERS Board adopted a funding policy to gradually lower MOSERS’ investment return assumption. This more accurately reflects capital market expectations and confirms the Board’s commitment to sound financial practices. It results in higher annual employer contribution requirements (and a lowered funded status) in the short-term. However, it is the board’s expectation that these changes will strengthen MOSERS’ financial position and will ultimately enhance the retirement security of our members.
While the dollar amount has increased, retirement benefits remain 1.5% of the total state budget. This is the same percent of the total state budget in FY2019 as it was 20 years ago in FY1999. For the past 60 years, the state of Missouri has honored its commitments to state employees and consistently funded the employer contributions recommended by our actuaries.
Apr 18, 2018, 8:29 AM By MOSERS
I have carried optional life insurance on my two children. But I am wondering if I now need to drop them, as they are both over the age of 18. My oldest is 27 & my youngest will be 26 in Oct. I don't want to drop them if I don't have to but also don't want to keep paying for something that I could not use if the worst Mother's fear where to occur.
You may retain MOSERS optional life insurance* for your children until age 26. The month your child turns 26, your coverage will automatically end. An exception is: Disabled children older than age 26, who are continuously incapable of self-sustaining employment because of developmental, intellectual or physical handicap and dependent on you for support, are eligible for dependent coverage.
When life insurance coverage ends for your spouse and/or child(ren), you have 60 days in which to convert coverage to an individual life insurance policy or buy portable group insurance. Evidence of insurability is not required.
We also recommend that you review your life insurance beneficiaries periodically to make sure they are up to date. You can review and update your beneficiaries by logging in to myMOSERS and completing and submitting a Life Insurance Beneficiaries form. For more information, see the Life Insurance Handbook.
*MOSERS' life insurance is not available to employees of the Department of Conservation or state regional colleges/universities except for Lincoln University and State Technical College of Missouri.
Apr 17, 2018, 9:01 AM By MOSERS
If a past employee opts to withdraw MOSERS funds all at once upon early retirement age, will that effect their monthly social security amount down the road, after reaching eligible age for such?
MOSERS does not offer a lump-sum withdrawal option of your monthly retirement/pension benefit if you take early retirement.
As far as Social Security retirement benefits are concerned, your MOSERS benefit is a “public” pension and, therefore, is not considered a salary or wage so it does not count towards the annual earnings limit for Social Security. Earnings while in a MOSERS-covered position were also covered by Social Security, so there is no reduction in your Social Security benefit due to your MOSERS benefit. (See the information from Social Security on the “Windfall Elimination Provision” at https://www.ssa.gov/pubs/EN-05-10045.pdf for more information.) We encourage you speak to a tax professional or financial advisor for advice specific to your situation. For more information about Social Security, the Social Security Administration website iswww.ssa.govor call them toll-free at (800) 772-1213.
Apr 10, 2018, 1:52 PM By MOSERS
Social Security says your benefit may be reduced if you get a pension from work not covered by Social Security. Is Mosers retirement covered or not covered?
Your employment that counted toward your MOSERS pension was covered by Social Security. Additionally, your MOSERS benefit is a “public” pension and, therefore, is not considered a salary or wage. It does not count towards the annual earnings limit for Social Security. (See the information from Social Security on the “Windfall Elimination Provision” at https://www.ssa.gov/pubs/EN-05-10045.pdf for more information.)
We also suggest you speak to a tax professional or financial advisor for advice specific to your situation. For more information about Social Security, the Social Security Administration website is www.ssa.gov or call them toll-free at (800) 772-1213.
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We strive to provide the most accurate information possible in our answers to Rumor Central questions. However, occasionally, laws, policies or provisions change and individual circumstances may vary. Please contact a MOSERS benefit counselor or see the handbooks in our website Library for more detailed information. If there is any difference between the information provided in this blog or on the MOSERS website and the law or policies that govern MOSERS, the law and policies will prevail. See our Privacy, Security & Legal Notices for more information.