MSEP COLA

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Did the governor change the 4% cola on the old plan (MSEP)? 
No. The provisions in SB 62 have NO impact on members of MSEP or MSEP 2000. What you may be referring to is one of the “offsets” in SB 62 which contribute to making the MSEP 2011 vesting reduction (from 10 years to 5 years) cost neutral for the state. These offsets apply only to new terminated-vested members of MSEP 2011, effective January 1, 2018—one of these provisions is that the first cost-of-living adjustment (COLA) for such members will be applied on the second anniversary of their retirement (rather than the first anniversary).

The offsets have no impact on current employees, retirees, or members of MSEP 2011 who retire directly from active state employment.

To review information about COLAs for other members, the COLA calculation depends on which plan you are in. If you retired under MSEP and were hired before August 28, 1997 and were vested in MSEP, you will receive a minimum 4% COLA until your accumulated COLAs are equal to 65% of your initial base benefit. This is called your COLA cap. Upon reaching the cap, your COLA will be calculated like other retirees and will range from 0% to 5% each year depending on the increase in the Consumer Price Index.

The 2017 COLA rate for MSEP retirees who have reached their COLA cap, MSEP members who were first hired on or after August 28th, 1997, and members retired under MSEP 2000 is 1.010%.

MSEP 2011 Members and SB 62

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I was hired July 2013, I will now be vested in 5 years instead of 10. My question is will I still have to contribute 4 percent to my retirement and will I still be 90 and out. thank you.
Yes, you will still have to contribute 4% of pay to your future retirement benefit. It is important to note that the 5-year vesting for MSEP 2011 members will go into effect on 1/1/2018. MSEP 2011 members must be actively employed on or after 1/1/2018 to be covered by this change.

Members of MSEP 2011 will become eligible for normal retirement when they are age 67 and have 5 years of service OR under the “Rule of 90” which is when they are at least age 55 and their age and service equal 90 when they terminate/leave state employment.

For more information on vesting, see The Change from 10 to 5-Year Vesting for MSEP 2011 Members.

Senate Bill 62 and Sick Leave

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We recently received several similar questions about SB 62:
1. How will SB62 change the way accumulated sick leave is calculated when a person chooses to retire?
 2. I am receiving conflicting information on the recently passed SB 62 and would like clarification.  I am currently employed by the state (hired in 1993) and I intend to participate in MSEP upon retirement.  With the recent passage of SB 62, will I receive service credit for unused sick leave, and, will I receive a COLA on my first anniversary?  It is my understanding that SB 62 provision do not apply to MSEP members but I want to be certain.  Thank you for your clarification.
 3. An article in the St. Louis Post Dispatch says "MOSERS is placing new restrictions on using accumulated unused sick leave in calculating a pension payout." What is the change and when will the new calculations be adjusted?
4. I have a question regarding the new pension law that was just passed, Senate Bill 62. According to the St. Louis Post Dispatch article, there are new restrictions on accumulated sick leave. Exactly what are these restrictions? Does this mean the blocks of sick leave I have accumulated will no longer count toward my retirement formula? The article leaves more questions than answers.
5. What did the Governor just sign re: retirement and unused sick leave and cost of living?

The provisions in SB 62 have NO impact on members of MSEP or MSEP 2000. Additionally, other than to reduce the vesting period from 10 years to 5 years, the provisions of SB 62 have NO impact on members of MSEP 2011 who work in a MOSERS benefit-eligible position until they reach normal retirement eligibility.

Effective January 1, 2018, only members who meet both of the conditions below will NOT have service credit granted for unused sick leave:

• First hired in a benefit-eligible position on or after January 1, 2011 (member of MSEP 2011) and
• Left state employment with a vested retirement benefit but prior to reaching retirement eligibility.

We refer to these members as “terminated-vested” members of MSEP 2011. (Similarly, terminated-vested members of MSEP do not receive service credit for unused sick leave if they left state employment prior to retirement eligibility, either normal or early.)

In contrast, all members of MSEP, MSEP 2000, or MSEP 2011 who retire directly from active employment receive service credit for unused sick leave. Every block of 168 hours of unused sick leave equals one month of service credit. Unused sick leave is used in calculating the amount of the benefit but does not factor into reaching retirement eligibility.

Note: Other “offsets” in SB 62 which contribute to making the vesting reduction cost neutral include the following for terminated-vested members of MSEP 2011 only, effective January 1, 2018:

• Cost-of-living adjustments (COLAs) will be applied on the second anniversary of retirement (rather than the first anniversary).
• If such a member dies prior to retirement eligibility, survivor benefits are not payable until the member would have reached their retirement eligibility age (rather than right away).

Is SB 62 Retroactive?

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It is my understanding that Governor Greitens signed SB62. Is this bill retroactive or does it start Jan 1, 2018 and go forward? Also, does this bill make all DOC employees 80 and out?
Effective January 1, 2018, the vesting requirement for current and future active members of MSEP 2011 (those member first employed in a MOSERS or MPERS benefit-eligible position on or after January 1, 2011) will be 5 years. It is not retroactive.

Vesting is one part of retirement eligibility. The other part is age. Normal retirement eligibility age requirements are:


MSEP                                                 MSEP 2000                           MSEP 2011
Age 65 with 5 yrs. of service
Age 60 with 15 yrs. of service
“Rule of 80” - at least age 48 with age and service equaling 80 or more

Age 62 with 5 yrs. of service
“Rule of 80” - at least age 48 with age and service equaling 80 or more

Age 67 with 5 yrs. of service (effective 1/1/18)
“Rule of 90” - at least age 55 with age and service equaling 90 or more at time of termination


Sick Leave Applied to BackDROP?

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I understand that unused sick leave may be applied towards retirement for the number of years/months worked. Can that sick leave be applied towards Back Drop? For example, if a person has six months of sick leave, can that individual only work 18 months and then apply the six months of sick leave to obtain a two year Back Drop?
No. You will get one month of credited service for each 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.

Maximum BackDROP

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I would like to know if one elects the 5 year backdrop are they able to work past the 5th year (and still get the backdrop) or is it mandatory to retire that year?
No, it is not mandatory to retire in the 5th year of your BackDROP. Your BackDROP* payment is based on the time worked after your normal retirement date. You may work more than five years beyond normal retirement eligibility, but the maximum BackDROP period is limited to five years prior to your actual retirement date.

Generally speaking, if you elect a longer BackDROP period, your lump sum will be more, but your monthly payment will be less. 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.

This graphic may help explain the big picture, or you can read the BackDROP brochure on our website for more information.

*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.

MOSERS' Funding Rate

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I retired in 2010 and, at the time, recall hearing that MOSERS was 82% funded. However, the latest report is that MOSERS is 69'6% funded. That seems an alarming decrease during a time that both stocks and bonds have generally done quite well. What is the cause of the decline?
The MOSERS Board of Trustees and the Missouri General Assembly have established a long-term plan relative to the actuarial funding and status of the system.  The MOSERS’ Board has, and continues to, implement a multi-year policy that reduces the assumption used by the system relative to investment returns, to address future capital market expectations.  In 2010, the Missouri General Assembly passed pension reform that established a new benefit tier within MOSERS (MSEP 2011).  This new tier is annually reducing the costs of the plan and will, over time, work to allow MOSERS to be a very viable, low-cost plan for all stakeholders.

While short-term experience may result in seemingly negative outcomes, such as a reduced funded status of 69.6%, the long-term strategies, in place, are solid and the objective data supports that conclusion.