Appropriation for Pension Funding

Posted on
Is this the first time you have had to ask the legislature for money to fully fund the retiree pensions?
No. The legislature appropriates money every year as part of its normal process of running state government to pay for salaries and benefits of state employees. A “fully funded” or “100% funded pension system” means the plan has sufficient assets to provide for all benefits at a certain date. Said another way, “fully funded” means the plan has what it needs to pay all current and future pension benefits.

Each year, based on various facts and assumptions about the future (such as the number of active employees, their years of service & salary, the number eligible to retire, the number who have retired, life expectancy, inflation, etc.)  independent actuaries determine how much money is required to fund MOSERS.

Money to pay current and future MOSERS pension benefits comes from:
1.      Contributions from employees who are members of the MSEP 2011 or Judicial Plan 2011 (4% of pay),
2.      Earnings on investments of money in the MOSERS trust fund, and
3.      Contributions from employers (state agencies) as a percent of active employee payroll.

Considering all of the above factors, each September, members of the MOSERS Board of Trustees certify a contribution rate, as a percentage of state employee pay. This budget request makes its way through the state budget appropriations process meaning it must be approved by the Missouri House and Senate and the Governor. Currently, the legislature is working on the budget for Fiscal Year 2018 which begins July 1, 2017. Below are several important facts:

•        The MOSERS Board certified a contribution rate for FY18 of 19.45% of covered payroll which results in an increase of approximately $46 million in funding for MOSERS (compared to FY17). The Governor’s FY18 budget fully funds the MOSERS budget request. The budget summary said, Governor Greitens is “committed to maintaining the state’s benefit package for its hard-working public servants” and “[o]ther states across the country are jeopardizing state employee retirement benefits by not adequately funding their pension systems.”
•        The legislature has consistently appropriated the full amount needed to fund the system over the long-term, as determined by independent actuaries, which contributes to Missouri’s AAA credit rating.
•        State employee pensions represent approximately 1.45% of the total state budget. The cost, as a percentage of the total state budget, has remained level for decades.
•        The average pension for general state employees retired from MOSERS is approximately $15,000 per year.
•        Accrued pension benefits from MOSERS are protected by law and cannot be reduced or modified.
•        Any future changes to MOSERS pension plan provisions would require passage by the Missouri legislature and approval by the Governor.

Change to MSEP 2011 Vesting?

Posted on
I would like to know if the vested time will change from 10 years of service back to 5 years and if so when will this be effective.
We don’t know the answers to your questions yet. Any change to the vesting requirement (or any other state employee pension provisions) requires passage of legislation by the Missouri General Assembly and approval by the Governor. There is currently a proposed house bill (HB 729) and a similar senate bill (SB 333) that would change vesting requirements for members of the MSEP 2011. We do not know what might happen with these individual bills during the current legislative session, but as always, we will monitor all legislation impacting MOSERS, and inform our members of any changes that become law. The 2017 legislative session ends on May 12, 2017. To track other pension related proposals, you may be interested in accessing the Legislative Status Report maintained by the Joint Committee on Public Employee Retirement (JCPER) at:
http://jcper.org/weekly-pension-legislation/ which is updated weekly.


Sick Leave Limit?

Posted on
Is there a limit on how much sick leave time can be applied/added to years of service? Also how is it figured.
 No, there is no limit on how much unused sick leave can be applied to credited service (except that it cannot exceed the amount possible to accrue during your time of state employment and employees of colleges and universities should discuss maximum accrual levels and procedures with their HR office).
You will receive one month of credited service for every block of 168 hours of unused sick leave reported to MOSERS by your employer at the time you leave your position. For example, if you have 400 hours of unused sick leave, you will receive credit for an additional two months of service when your retirement benefit is calculated (400/168=2.38).
Your sick leave is used in calculating the amount of your retirement benefit, but cannot be used to determine eligibility for retirement. That is, the two months of unused sick leave will not make you eligible for retirement two months sooner but will increase the amount of your payment.

MSEP 2011 Changes?

Posted on
I just read your article that states
• In 2010, the legislature made changes to state employee pensions which, among other cost-saving measures, requires employees to contribute 4% of pay and increases the retirement age from 62 to 67.
I am in the MSEP 2000 plan. Does this change apply to me
No, the 2010 plan changes do not apply to you if you are a member of MSEP or MSEP 2000. The changes affect only those employed in a MOSERS or MPERS benefit-eligible position for the first time on or after 01/01/2011. Those members belong to the new tier referred to as the MSEP 2011. Members who aren’t sure which plan they belong to can go to the Which Plan Am I In? webpage.

Is MOSERS Properly Funded?

Posted on
In response to the op-ed in the Kansas City Star on Feb 5, 2017 titled “Underfunded state pensions are Missouri’s crisis on the horizon,” we have received some questions from members asking if MOSERS is properly funded.
The MOSERS Board of Trustees monitors all financial aspects of the plan and continues to take necessary action to stabilize plan funding and provide sustainability for the future. Our long-term plan is solid and the objective data supports that conclusion.
In 2010, the legislature made changes to state employee pensions which, among other cost-saving measures, requires employees to contribute 4% pay and increases the retirement age from 62 to 67. As of January 2017, nearly 38% of active state employees are in the MSEP 2011.
The MOSERS Board certified a contribution rate for FY18 of 19.45% of covered payroll which results in an increase of approximately $46 million in funding for MOSERS (compared to FY17). The Governor’s FY18 budget fully funds the MOSERS budget request. The budget summary said, Governor Greitens is “committed to maintaining the state’s benefit package for its hard-working public servants” and “[o]ther states across the country are jeopardizing state employee retirement benefits by not adequately funding their pension systems.”
The legislature has consistently appropriated the full amount needed to fund the system over the long-term, as determined by independent actuaries, which contributes to Missouri’s AAA credit rating.
State employee pensions represent 1.45% of the total state budget. The cost, as a percentage of the total state budget, has remained level for decades.
The average pension for general state employees retired from MOSERS is approximately $15,000 per year.
Accrued pension benefits from MOSERS are protected by law and cannot be reduced or modified.
Any future changes to MOSERS pension plan provisions would require passage by the Missouri legislature and approval by the Governor.

MOST Deduction from Deferred Comp Distribution?

Posted on

Is it possible to direct a 2017 mandatory Deferred Comp distribution to a retiree's current grandchildren's MOST 529 account that would also eliminate the requirement of paying state and federal taxes on such directed mandatory distributions?
No, it is not possible to eliminate the requirement of paying state and federal taxes on a required minimum distribution (RMD) from the deferred compensation plan. You can however take after-tax money from the RMD and make a contribution to a MOST 529 account and possibly receive a state tax deduction. For more information on this deduction, visit the MOST 529 website.

Healthcare Retirement Incentive

Posted on
Is there any truth to the rumor that there could possibly be insurance coverage for retirees until they are eligible for Medicare? 
There was a healthcare retirement incentive (HB 1134) that was introduced in the 2015 legislative session to subsidize retiree health care premiums for certain state employees, but it didn’t pass. It would have to be reintroduced in the current legislative session to be considered again. We are not aware of any similar proposed bills.  

Specific questions regarding health care benefits should be directed to your health care provider, which, for most state employees, is Missouri Consolidated Health Care Plan (MCHCP).