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  • BackDROP & Returning to Work

    Aug 28, 2018, 1:13 PM By MOSERS

    What would happen if I retire and draw backdrop and later decide to return to work for the State in a benefit eligible position? I know my retirement benefit would stop but what would happen with the backdrop?

    If you retire and return to work in a benefit-eligible* position, your monthly retirement payment will stop as soon as we are notified that you are re-employed. However, any BackDROP money you received is yours to keep – there is nothing that requires you to return any of it to MOSERS if you return to work. Once you have worked for at least 12 continuous months in your new benefit-eligible position, you will begin accruing a separate retirement benefit. Once you re-retire, your previous benefit will restart and your new benefit (based on your new service and salary) will be calculated and your benefit payments (old benefit plus new benefit) will resume. You are not allowed to elect BackDROP after you have first retired. In other words, you will not be eligible for BackDROP if you return to state employment after having already retired from the state.

    If you retire and return to work in any position not covered by MOSERS or MPERS (including work for the state in a non-benefit-eligible position), you may continue receiving your MOSERS pension benefits and earn as much as you wish. Such employment will have no effect on your MOSERS benefit.

    *A benefit-eligible position is one that normally require at least 1,040 hours of work per year, is permanent in nature, and is covered by MOSERS or the MoDOT and Patrol Employees’ Retirement System (MPERS). Your employer, not MOSERS, determines if you are working in a benefit-eligible position.

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  • BackDROP & Survivor Benefit?

    Aug 21, 2018, 3:31 PM By MOSERS

    If I have completed my five year backdrop period and continue working in my state position, would my spouse receive the backdrop lump sum payment if I died while still working?

    For example, if I completed the five year backdrop period on 8-1-2018, continued working, planned on retiring on 6-1-2019, but died on 3-1-2019 - would my spouse receive the lump sum back drop as well as the monthly survivor pension benefit, or would she just receive the monthly survivor pension benefit?

    If you pass away before your retirement date, any elections you made about retirement are null and void, including any elections about BackDROP. If you were still working and had not yet reached your retirement date, you are considered an “active member” and we must pay your eligible survivor. Your spouse’s monthly survivor benefit would be based on the Joint & 100% benefit payment option and calculated using your final average pay and credited service as of your date of death. Your spouse would not receive the BackDROP lump-sum payment if you died prior to your retirement date. In calculating your spouse’s monthly benefit, we would count the time in what would have been your BackDROP period – your total years and months of creditable service. For more information regarding survivor benefits, please visit the death of a member section of our website.

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  • High 36

    Aug 3, 2018, 1:52 PM By MOSERS

    My five year BackDROP period is complete. I know my retirement check is based on my best 36 months. If I do not elect BackDROP, Can I use my best 36 months throughout my entire career, or only the period prior to my original BackDROP date?

    Yes, if at retirement you do not elect BackDROP, we will review your entire pay history and find the 36-month period with your highest pay, which may be in your final years of employment, and will use that in calculating your monthly benefit.

    Background for Other Readers: Any pay or service you get during your BackDROP period is not counted when calculating your monthly benefit payment. If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your MOSERS-covered work history prior to your BackDROP date.

    But keep in mind, you are not required to take BackDROP, regardless of how long you work beyond normal retirement eligibility, and you don’t have to notify MOSERS of any decisions about BackDROP until you retire. You may elect not to take BackDROP if you want all your service and pay to count and, likely, increase your monthly benefit.

    Our BackDROP page, with a BackDROP graphic near the bottom, may help you visualize how it works or you can read the BackDROP brochure for more information. BackDROP can be complicated to understand, so MOSERS benefit counselors are available to help by phone or through an in-person appointment. Call (800) 827-1063 to discuss your options. Counselors can also provide you with benefit estimates with and without the BackDROP so you can compare.

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  • Final Average Pay & BackDROP

    Aug 1, 2018, 12:53 PM By MOSERS

    Note: the question below refers to a previous Rumor Central question from July 2018:

    "As you referenced, FAP is determined using your highest 36 full consecutive months of pay when looking at your entire work history covered under MOSERS. Practically speaking, for most, that is their last three years, but not always. The exception to this would occur under the BackDROP (if eligible). If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your MOSERS-covered work history prior to your BackDROP date. In other words, any pay or service during your BackDROP period doesn’t count toward your monthly benefit payments."
    Okay, based off this information, since I am working on my back-drop currently, an increase in pay will NOT increase my retirement? I am planning on working overtime as a Correctional Officer, will this have an effect on the amount of money I receive in my retirement? Yes or No...

    You are correct that pay earned during your BackDROP period will not count towards calculating your retirement benefit. Your monthly benefit will be calculated using your final average pay (FAP) and credited service as of your BackDROP date (the day your BackDROP period begins).

    Any pay or service you get during your BackDROP period is not counted when calculating your monthly benefit payment. To be clear, any overtime pay you receive during your BackDROP period will not be considered in calculating your final average pay. But keep in mind, you are not required to take BackDROP, regardless of how long you work beyond normal retirement eligibility, and you don’t have to notify MOSERS of any decisions about BackDROP until you retire. You may elect not to take BackDROP if you want all your service and pay to count and, likely, increase your monthly benefit.

    Our BackDROP page, with a BackDROP graphic near the bottom, may help you visualize how it works or you can read the BackDROP brochure for more information. BackDROP can be complicated to understand, so MOSERS benefit counselors are available to help by phone or through an in-person appointment. Call (800) 827-1063 to discuss your options. Counselors can also provide you with benefit estimates with and without the BackDROP so you can compare.

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  • BackDROP Payment

    Jul 26, 2018, 3:57 PM By MOSERS

    If you opt to have the cash pay-out of your backdrop, how long does it take after your retirement date to receive it?

    Your BackDROP* payment (either cash or rollover) will be paid on the last working day of the month your retirement is effective, along with your first monthly retirement benefit payment. For example, if your retirement date is May 1, your BackDROP payments will be made on the last working day of May. This is assuming you have completed all necessary forms, including your BackDROP Distribution form, when you retire online or on paper.

    Please be sure to read the Special Tax Notice brochure on our website to learn about various tax consequences if you take some or all of your BackDROP payment in cash.

    *BackDROP is an option that allows eligible members to receive a lump-sum payment in addition to an ongoing monthly payment. It 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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  • BackDROP Decisions

    May 29, 2018, 4:06 PM By MOSERS

    I was eligible for retirement on 06/01/2017 on the 80 and out. I am just getting one year of backdrop in. Do I need to submit any paperwork advising of my intentions of working on the backdrop? 

    The answer is no. You just keep working. You don’t need to notify MOSERS of any decisions about BackDROP until you retire. If you retire online, you may make your BackDROP election when you choose your benefit payment option.

    However, you must work at least two years beyond when you are first eligible for normal retirement to be eligible for BackDROP. BackDROP provides a lump-sum payment in addition to your ongoing monthly benefit payment in retirement. MOSERS has many different resources to find out more about BackDROP. * Besides the member handbook, we also have a BackDROP page with links to many resources on our website.

    * Note: The BackDROP is available only to general state employees in the MSEP and the MSEP 2000.

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  • Sick Leave & BackDROP Period

    May 29, 2018, 4:02 PM By MOSERS

    Questions regarding sick leave. I have around 22 months of employment remaining before I reach the 80 and out. I have around 1900 hours of sick leave currently. Does sick leave still contribute towards your credible service period? If I elect to backdrop, does this apply to the backdrop period if I do not count this towards credible service? Thank you!

    Yes, you will get one month of credited service for each block of 168 hours of unused sick leave you have at retirement. While this will increase the amount of your benefit, unused sick leave cannot count toward eligibility for retirement or as part of the BackDROP period. That is, the months of unused sick leave will not make you eligible for retirement (or BackDROP) sooner, but will increase the amount of your payment once you have retired.

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  • Taxes on BackDROP

    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.

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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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  • 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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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.