rumor-central-header

Hearing Rumors? Not sure your co-worker has it right?

Rumor Central has the answers! Submit your question or just browse our blog to separate facts from fiction.


Pay Raise & Final Average Pay

Apr 12, 2019, 09:33 AM by MOSERS

Will the raise that we are suppose to get in 2020 effect my retirement? If I am already on my BackDROP and if I retire in dec of 2021.

Assuming the pay raise is included in the final state budget and goes into effect in January 2020, if you continue working and do not take BackDROP, the impact of a pay increase on your monthly retirement benefit payment would be dependent upon how long you continue working.

Remember, in calculating your monthly benefit, one factor is your Final Average Pay, which is your highest 36 consecutive months of pay. So, if you got a raise and worked a few months past January 2020, the impact may be very small. If you got a raise and worked an additional 36 months, the impact would be bigger.

Any pay earned during your BackDROP period has no impact on either your monthly benefit amount or your BackDROP lump-sum amount. If you are eligible for and elect the BackDROP upon retirement, your FAP will be calculated using your MOSERS-covered work history prior to your BackDROP date. In other words, pay (and service) during the BackDROP period is excluded when calculating your monthly benefit amount.

But, after you retire, keep mind that MOSERS retirees receive an annual cost-of-living adjustment (COLA) of 0-5%. This amount is calculated each January and is based on the CPI (Consumer Price Index), which is unrelated to any pay raises state employees receive. You can find more information about the retiree COLAs on our website.

You can run benefit estimates under a variety of scenarios by logging in to myMOSERS or asking a MOSERS benefit counselor to run them for you. You may find our Creating a Benefit Estimate video and our Comparison Calculator helpful in weighing your options.

Print Friendly and PDF

Topics

Archive

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.