Funding the plan

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We heard on the local news this morning that the state retirement is underfunded by a “Trillion” dollars. Is this fund underfunded?
What you heard was prompted by a report distributed by the Pew Center on the States, a division of the Pew Charitable Trusts. The information in the report covered all state retirement systems in the country, so “trillion” dollar shortfall you noted was not specific to Missouri. Once you get past the sensationalistic title, “The Trillion Dollar Gap: Underfunded State Retirement Systems and the Roads to Reform,” you will see that most states have ample assets in reserve to pay pensions over the near and long term. The study notes that in the aggregate, the states’ retirement systems are 84% funded, and most experts advise at least an 80% funding level. MOSERS is currently 83% funded and, like most of the other states, has ample assets in reserve to pay pensions over the near and long term. While the report does identify states that have failed to make the required pension contributions in a consistent manner, you can be assured that the MOSERS required contributions have been appropriately funded by the legislature.
The vast majority of the financing gap noted by the Pew report is not attributable to pensions, but to retiree health care programs. Funding retiree healthcare is a reasonably recent phenomenon that was prompted by a change in accounting standards and MOSERS does not administer health care benefits. Combining these two very different benefits in this report has created confusion.
In MOSERS case, the plan is well funded and has always received the necessary state contributions to assure financial soundness of the plan. While we were affected by the unprecedented market decline of 2008, we earned $1.1 billion on investments in 2009, and have regained a good deal of the losses incurred in the previous year. Your retirement plan is supported by a professionally managed, well diversified portfolio of securities and the state’s legally binding commitment to contribute the amounts necessary to support the retirement benefits provided by law.
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Pension vesting

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Can an employee lose or have their pension taken away from them?
Under present law, an employee covered by the system becomes vested after reaching five years of service. Being vested means you are entitled to a benefit from the plan once reaching a certain age for eligibility. For example, a person with six years of service could start drawing a benefit at age 62. A vested benefit cannot be taken away except for members who are found guilty of a plan-related felony or elected officials that are convicted of a felony associated with the duties of their office. Print Friendly and PDF

Deferred Compensation match

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The St Louis paper stated that the $35.00 state match for deferred comp is being eliminated. Is that true?
The state match is being suspended indefinitely. As part of the most recent announcement of additional expenditure restrictions necessary to balance the state budget, the State of Missouri, Division of Budget and Planning announced recently that the employer incentive (match) associated with the State of Missouri Deferred Compensation Plan will be suspended indefinitely. For more details, go to the Deferred Compensation Plan’s website, link below:
You may also be interested in these frequently asked questions related to this announcement, link below:

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