Effect of Financial Market Turbulence on MOSERS' Benefits

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I have heard the financial meltdown now happening has caused Mosers a lot of losses, how will this affect our retirement?
Many retirees and employees have asked us if the current financial market turbulence will have a negative impact on their MOSERS retirement benefits.
It is important to understand that our retirement program is a “defined benefit” plan. The MOSERS retirement benefits are “defined” by Missouri law and are based on your years of service and final average pay. (Benefits are not based on the earnings of the plan as would be the case if it were a defined contribution plan.). The State of Missouri, as the employer, is obligated by law to make the contributions to MOSERS that are necessary to fund the promised retirement benefits. Regardless of the MOSERS investment returns, your retirement benefits are secured by law.Our Executive Director posted the following feature on our website to address current financial market and investment return concerns of our members.
Executive Director Message – “Your MOSERS Benefits Are Secure Print Friendly and PDF

Retiree Working Multiple Part-Time Positions

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Section 104.380 allows a department to employ a retiree in a position so long as the position the retiree is employed in is a non-benefit eligible position (less than 1040 hours per year). Since the 1040 hour requirement is for the position, could a retiree occupy two non-benefit eligible positions for a single department and work more than 1039 hours per year so long as the retiree does not work more than 1039 hours in any given non-benefit eligible position?
No. In the situation you described, the law requires that the employer combine the service rendered in determining whether or not the retiree has again become an “employee” and thus eligible to receive benefits. For example, if a retiree held two positions in an agency, each requiring 600 hours of service in a year, the retiree would have 1,200 hours of service in the aggregate which, of course, would exceed the 1,040 hour limitation. Print Friendly and PDF

Eligibility for 4% COLA Rate

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Under what circumstances can a person retire and choose to have a guaranteed 4% COLA?
Generally speaking, you will be eligible for the minimum 4% COLA rate if you:
  • Began employment with the state, in a benefit eligible position, prior to August 28, 1997;
  • Elect to retire under the Missouri State Employees’ Plan (not MSEP 2000); and
  • Have not reached your COLA cap (which happens when the sum of your COLAs equals 65% of your initial benefit amount)
Example of Calculating the 65% COLA Cap:
$1,000 (Initial Benefit) x .65 (65%) = $ 650 (COLA Cap)
It takes approximately 12 - 13 years to reach the COLA cap. Once the cap is reached, your annual COLA rate will be equal to 80% of the change in the Consumer Price Index (CPI). By law, the annual COLA rate cannot exceed 5%.

(As a point of clarification, the term COLA cap is a little misleading because it may give you the impression that your cumulative COLAs cannot exceed 65% of your initial benefit amount. That is a carryover from the days when COLAs truly were limited to 65% of the initial benefit amount – under that arrangement, once you had been retired for something in the range of 12 to 13 years you were no longer eligible for COLAs for the balance of your life. As the result of a law change, the cap now only establishes the period during which you are eligible for the 4% minimum if you meet the other conditions stipulated above.) Print Friendly and PDF

State Income Taxes on Retirement Benefit Payment

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Are State Employee Retirees required to pay state income taxes on their retirement check from the State of Missouri?
If you claim residence in Missouri, your MOSERS benefit is subject to Missouri income tax. MOSERS will withhold Missouri income tax as requested on your Substitute W-4P (Withholding Certificate for Pension Benefit Payments). This withholding authorization can be submitted electronically on our website. Or, if you prefer, you may download the form to complete and mail it to MOSERS.
Public Pension Exemption:In 2007, Governor Blunt signed into law a bill regarding public pension exemption. Married couples with Missouri adjusted gross income less than $100,000 and single individuals with Missouri adjusted gross income less than $85,000, may deduct the greater of $6,000 or a percentage of their public retirement benefits, to the extent the amounts are included in their federal adjusted gross income. The deductible percentage of their public retirement benefits will increase until 2012. A breakdown of the yearly percentages is as follows:
The total public pension exemption is limited to the maximum social security benefit of each spouse. Married couples with Missouri adjusted gross income greater than $100,000 and single individuals with Missouri adjusted gross income greater than $85,000, may qualify for a partial exemption. See the
public pension exemption eligibility chart or complete the public pension calculation located on form MO-A , to determine if you are eligible. Print Friendly and PDF

Unused Sick Leave in BackDROP Calculation

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Where does the sick leave balance fit into the formula when you are electing to have a BackDrop option? Is it included in the retirement amount or the BackDrop amount?
Your unused sick leave balance is used in calculating the dollar amount of your retirement benefit and BackDROP amount. However, it does not change your eligibility date or your BackDROP period. We use your unused sick leave balance as of the day you leave state employment. Print Friendly and PDF