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  • Termination & Retirement Benefits

    Apr 3, 2018, 3:59 PM By MOSERS

    If you are fired from state government, with or without just cause, do you lose your retirement benefits?

    No. If you are vested with MOSERS (you have at least 5 years of service) and then leave state employment, you will be eligible* for a lifetime monthly benefit, which will begin once you meet the age requirement (and all other legal requirements) and retire under a MOSERS defined benefit pension plan. In general, your benefits will be based on the laws in effect on the day you leave state employment.

    See What’s My Plan? (bottom of the MOSERS website homepage) with information about plan membership, retirement eligibility requirements, and other plan provisions. Contact a MOSERS benefit counselor to discuss your specific situation. You may also contact a MOSERS benefit counselor to request benefit estimates for various scenarios (including a scenario of leaving employment prior to retirement eligibility).

    *An exception is if you were fired because you were convicted of a specified felony committed in connection with your job as a state employee on or after August 28, 2014. See Missouri Revised Statute §105.669.

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  • MOSERS Temporary Benefit & Social Security Benefits

    Apr 3, 2018, 3:29 PM By MOSERS

    I turned 62 on Feb 1, 2018. While I was aware that I would be SS eligible at 62, it was my understanding that my retirement supplemental benefit would remain in affect until I elected to take Social Security. Now I see from Mosers correspondence, buried on member website, that my benefit dropped $1130/month on March 30. I was not informed of this until March 26.

    Why wasn't I informed sooner so that I could make some decisions on how I was going to cover this difference.
    This is a disservice to members. I am sure others have been shocked and inconvenienced as well.

    For the sake of others reaching this 62 year old threshold, this procedure needs to change.

    We apologize that you were surprised that the Temporary Benefit ends at age 62. The MOSERS Temporary Benefit* was designed to serve as a bridge between your MOSERS retirement and your eligibility for early Social Security benefits but the two are not directly linked. The MOSERS Temporary Benefit ends at age 62 regardless of your decision to apply for early Social Security retirement benefits or not. Taking early/reduced Social Security benefits, as opposed to waiting until you are eligible for full Social Security benefits, is a personal decision with pros and cons on both sides. 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.

    In addition to sending the letter you mentioned, we discuss in PreRetirement Seminars and note in the General Employees’ Retirement Handbook (MSEP/MSEP 2000), on benefit estimates, and in Annual Benefit Statements that the Temporary Benefit ends at age 62. In order for the Temporary Benefit to be payable beyond age 62, current law would have to be changed.

    *The Temporary Benefit is a provision of the MSEP 2000 or MSEP 2011. It is not available in the MSEP. The Temporary Benefit applies only if you retire under MSEP 2000 or MSEP 2011and are younger than age 62 when you retire.

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  • Lump-Sum Payment Options

    Apr 3, 2018, 8:58 AM By MOSERS

    If I resign before my retirement date and am vested is there an option to take a lump sum payment? To either rollover into a personal IRA or cash out. If so how do I figure that amount?

    No, there is currently no lump-sum option in the scenario you described. If you are vested with MOSERS (you have at least 5 years of service) and then leave state employment prior to reaching the age to qualify for retirement eligibility, you would be considered a “terminated-vested” member. You will become eligible to begin drawing your lifetime monthly benefit payments once you also meet the age requirement (and all other legal requirements) and retire under a MOSERS defined benefit pension plan.

    The scenarios in which a lump-sum option are available through MOSERS are the following:

    1. BackDROP - Work in a MOSERS benefit-eligible position at least two years beyond normal retirement eligibility and then you can elect a lump-sum payment at retirement in addition to your lifetime monthly benefit payments.
    2. Refund of Employee Contributions - If you are a member of the MSEP 2011 or Judicial Plan 2011 (first employed in a MOSERS benefit-eligible position on or after 1/1/2011 and contribute 4% of our pay to MOSERS) and you leave state employment prior to reaching normal retirement eligibility, you may request a refund of your member contributions.
    3. If you meet the qualifications for the Cash Out program (available only to vested members of MSEP who left state employment between 10/1/1984 and 9/1/2002) or a “Buyout” program authorized by the legislature (among other eligibility criteria, you must not have worked in a MOSERS or MPERS benefit-eligible position at any time since 6/30/2017), you may be eligible for a lump-sum payment. However, no one currently employed in a MOSERS benefit-eligible position is eligible for either the Cash Out or Buyout lump-sum program.

    Keep in mind that any of the following may affect your retirement eligibility: Your retirement plan (MSEP, MSEP 2011, etc.), age, service, and if you retire directly from active employment versus leaving state government and waiting to retire. Contact a MOSERS benefit counselor to discuss your specific situation. You may also contact a MOSERS benefit counselor to request benefit estimates for various scenarios (including a scenario of leaving employment prior to retirement eligibility).

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  • MOSERS' Appropriations

    Apr 3, 2018, 8:42 AM By MOSERS

    Now that the House has passed and sent to the Senate HB 2005, could you tell me whether the amounts appropriated for MOSERS ($417,959,249) include all of the amount requested by the MOSERS Board and, if not, what percentage of the request it does include.

    Also, could you tell me whether the amount appropriated for MCHCP ($499,756,307) includes the amount requested by MCHCP to subsidize retired state employees' secondary insurance premiums as has been the case in past years?

    Yes, the amount appropriated by the House Appropriations subcommittee in HB 2005 fully funds the employer contribution rate as certified by the MOSERS Board. HB 2005 has now been sent to the Senate and must be passed in the Senate and then signed by the Governor. Changes could still be made. We will monitor all bills related to retirement benefits and let our members know about changes, if any, that may affect them.

    The House Appropriations subcommittee included $449,656,307 as the state’s contribution to MCHCP. Since health care is a benefit that we do not administer at MOSERS, we are not in a position to comment about whether or not it was the amount requested by MCHCP. Please contact MCHCP directly at (800) 487-0771 or www.mchcp.org for more information.

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  • BackDROP Overview

    Mar 28, 2018, 11:16 AM By MOSERS

    What is BackDROP?

    BackDROP, or the Deferred Retirement Option Provision, gives you the option of receiving a lump-sum payment, in addition to your lifetime monthly benefit payments, at retirement. It is a benefit payment option available for general state employees in the MSEP or MSEP 2000 who work at least 2 years (or more) beyond their first normal retirement eligibility date.

    The BackDROP lump-sum is 90% of the amount that you would have been eligible to receive during your BackDROP period if you had been retired during that time. If eligible, you will select your BackDROP period during the retirement process. The maximum BackDROP period is 5 years. The length of the BackDROP period you select will determine the amount of your lump-sum payment. Generally speaking, if you elect a longer BackDROP period, your lump-sum payment will be more, but your monthly payments will be less.

    You are not required to take BackDROP, and you don’t have to notify MOSERS of any decisions about BackDROP until you retire. More information about payment options is available on the BackDROP page on our website.

    BackDROP can be complicated to understand, so MOSERS benefit counselors are available to help by phone or in person by appointment. Call (800) 827-1063 to discuss your options. Counselor can also provide you with benefit estimates, with and without the BackDROP included, so you can compare.

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  • Rule of 80 & Retirement Eligibility

    Mar 26, 2018, 8:42 AM By MOSERS

    What happens if I leave state employment prior to my eligible retirement date under the Rule of 80? How is my monthly retirement benefit calculated if that happens, and when will I first be eligible to begin receiving my retirement benefit? Also, under this scenario, what retirement benefits, if any, would I lose if I left state employment prior to my Rule of 80 date?

    If you are vested with MOSERS (you have at least 5 years of service*) and then leave state employment, you will be eligible for a lifetime monthly benefit, which will begin once you meet the age requirement (and all other legal requirements) and retire under a MOSERS defined benefit pension plan.

    If you are a general state employee, your retirement benefit is calculated using a three-part formula:

    Final Average Pay (FAP)        x            Credited Service         x             Multiplier       =               Monthly Base Benefit  

    (The multiplier is determined by your plan; 1.6% for MSEP; 1.7% for MSEP 2000/MSEP 2011.)

    General state employees who are in the MSEP are eligible for normal retirement once they meet one of the following sets of age and service criteria:

    • Age 65 + 5 years of service
    • Age 60 + 15 years of service
    • “Rule of 80” – (at least age 48) Age + years of service = 80 or more.

    See What’s My Plan? (bottom of the MOSERS website homepage) with information about plan membership, retirement eligibility requirements, and other plan provisions.

    If you are a member of MSEP and you leave state employment before reaching normal retirement eligibility, you may still retire under “80 & Out” (the Rule of 80). Plan provisions in MSEP allow members who terminate employment to “age into” the Rule of 80. (This does NOT apply to members of MSEP 2000 or MSEP 2011**.) However, keep in mind that leaving state employment before reaching eligibility will likely delay when you reach “80 & Out” and reduce your benefit because you will no longer be accruing service. So, you may have to wait longer to begin receiving a smaller benefit if you leave state employment prior to reaching the Rule of 80.

    Keep in mind any of the following may affect your retirement eligibility: your retirement plan (MSEP, MSEP 2011, etc.), age, service, and if you retire directly from active employment versus leaving state government and waiting to retire. Contact a MOSERS benefit counselor to discuss your specific situation. You may also contact a MOSERS benefit counselor to request benefit estimates for various scenarios (including a scenario of leaving employment prior to retirement eligibility).

    *The 5-year vesting for MSEP 2011 member went into effect on 1/1/2018, and MSEP 2011 members must be actively employed on or after 1/1/2018 to be covered by this change.

    **Plan provisions for MSEP 2000 do not allow members to “age into” the Rule of 80/80 & Out. Plan provisions for MSEP 2011, do not allow members to “age into” the Rule of 90/90 & Out.

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  • BackDROP & Social Security

    Mar 21, 2018, 8:34 AM By MOSERS

    In looking over my Social Security application, I see that they want to know what my earnings will be in 2018. I plan to roll over my MOSERS backdrop--will the amount of my backdrop be considered earnings by the Social Security Administration? Or do I only submit my projected salary earnings for 2018?

    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.

    *BackDROP is available only to general state employees who are members of MSEP & MSEP 2000 and who work at least two years beyond normal retirement eligibility.

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  • COLA Cap

    Mar 19, 2018, 9:44 AM By MOSERS

    With regard to the following statement in the most recent MOSERS emailed information:
    If you retire under the MSEP and were hired before August 28, 1997, you will receive a COLA of at least 4% each year (maximum 5%) until you reach your COLA cap. The COLA cap is when the sum of your COLAs equal 65% of your initial benefit amount.
    Question: Please explain in more detail how the COLA cap is figured.
    Is the amount of the annual COLA, for example, a 4% COLA in 2015, again in 2016, again in 2017, and again in 2018 (that amounts to about $40/month in each of those years) multiplied by 12 to get the total annual COLA ($480) for each of those years and then all of the annual totals are added together to determine when the 65% limit has been reached?
    For ex.: $40 X 12 X 4 = $1920
    Or perhaps it’s figured as follows: $40/mo. COLA x 8, 9, 10, 11, 12 years etc.
    If not, please explain in detail how the COLA cap of 65% is figured. Thank you. 

    The COLA cap* is calculated based on the initial base benefit amount, rather than on the COLA itself. Your estimated date to reach the COLA cap can be found on your annual benefit statement in the COLA section. It says “Estimated Date to Reach 65% COLA Cap….” and a date. Typically, it is around 12-13 years after you’ve retired.

    Example of Calculating the 65% COLA Cap:

    $1,000 (Initial Base Benefit) x .65 (65%) = $ 650 (COLA Cap) 

    So, when you look back at your initial base benefit, once it has increased by 65% due to COLAs, you will no longer get the minimum 4% COLA; instead, your COLA will be based on 80% of the increase in the CPI and be between 0 and 5% each year. For example, for those who have their COLA calculated this way, it is 1.704% in 2018.

    *The COLA cap does not apply to MSEP 2000 members; it applies only to members of MSEP hired prior to 8/28/97, who receive a minimum 4% COLA until meeting their COLA cap.

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  • MSEP 2011 Retirement Eligibility

    Mar 14, 2018, 8:31 AM By MOSERS

    Vesting is changed to 5 years, so why is the monthly benefit not payable until 10 years? If I were to retire after 8 years, would I receive a lump sum payout of my contributions plus any amount vested by the plan, or would the benefit be deferred until after 10 years?

    Vesting is one part of retirement eligibility. The other part is age. Both vesting and age requirements must be met in order to retire under a MOSERS defined benefit plan. As a member of MSEP 2011, you will become eligible for normal retirement when you have at least 5 years of service and reach age 67 OR under the “Rule of 90” which is when you are at least age 55 and your age plus service equals 90 prior to you leaving state employment.

    Once you are vested with MOSERS, even if you leave state employment, you will be eligible for lifetime monthly benefit payments once you also meet the age requirement (and any other legal requirements) and retire under a MOSERS defined benefit pension plan. The 5-year vesting for MSEP 2011 members went into effect on 1/1/2018 and MSEP 2011 members must be actively employed on or after 1/1/2018 to be covered by this change.

    Your contributions go toward helping pay for your future lifetime monthly benefit payments. You will receive a lump-sum payment only if you request a refund of your employee contributions. By taking a refund, your forfeit all your credited service. If you are vested and take a refund, you give up your future lifetime monthly benefit payments.

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  • Comparison of MSEP & MSEP 2000

    Feb 26, 2018, 4:09 PM By MOSERS

    What are the major differences between MSEP & MSEP 2000?

    The MSEP and the MSEP 2000 have various differences including different multipliers in the formula used to calculate your monthly payment, different benefit payment options, different cost-of-living adjustments (COLA), and different eligibility criteria. See the pages linked above or What’s My Plan? (bottom of the MOSERS website homepage) with information about plan membership, retirement eligibility requirements, and other plan provisions. 

    We have a helpful Comparison Calculator on our website where you can compare the long-term impact of electing MSEP versus MSEP 2000, different BackDROP* periods under the different plans, and various other options. The Comparison Calculator videos are helpful in demonstrating how to use this tool. Or, you can contact a MOSERS benefit counselor to ask that they provide you with various benefit estimates and Comparison Calculator results.

    We also encourage you to attend a MSEP/MSEP 2000 Ready to Retire/PreRetirement Planning Seminar when you are within 5 years of eligibility. This free full-day seminar includes information on differences in the plans, benefit payment options, and BackDROP, among other topics.

    Your defined benefit retirement plan through MOSERS includes a lifetime benefit, regardless of the plan or payment option you elect at retirement.
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Disclaimer

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.