What Happens to the MOSERS Fund in the Event of Another Stock Market Crash?

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What would happen to the pension fund if the stock market collapsed?
Perhaps a better way to frame your question would be, “What would happen to the pension fund if the stock market collapsed again?” Two times since the turn of the century, the broad US stock market declined by over 40% -- once at the beginning of the century and again in the 2008-2009 time frame. By most standards, both of those could be thought of as a collapsing stock market and, despite those events, all MOSERS’ benefits have continued to be paid in full.
One of the greatest priorities of the MOSERS Board of Trustees, with advice from the internal investment staff and our asset consultant, is the diversification of the MOSERS portfolio and the appropriate mix of stocks, bonds, and other assets to provide risk reduction and enhance the performance of the total fund.
MOSERS’ portfolio is diversified among a myriad of investments and investment strategies. The objective of this diversification is to provide risk reduction in a variety of market/economic environments. While a portion of the portfolio may experience market downturns in any given period, the mix of assets with their unique characteristics allows the fund to “weather” these downturns more easily. We have a portion of the fund allocated to investments that are not dependent on the returns generated by the stock market. Some examples are core fixed income (bonds), commodities, timberland, private equity, and Treasury Inflation Protected Securities (TIPS).
You can read more about MOSERS asset allocation here and the investment performance here. It is important to keep in mind that MOSERS is a long-term investor and, as such, stays focused on long-term investment objectives.
But most importantly for you, MOSERS is a defined benefit plan, meaning that unlike individual investment accounts, your benefits are not impacted by financial market ups and downs. Your benefit amount is based on your length of service and salary history using a formula that is defined by Missouri law. Consequently, your benefit amount is not impacted by volatility in the financial markets.
Regardless of investment returns, your benefits are secure. The benefit formula is established by law and contributions to the fund are an obligation of the State of Missouri. The MOSERS board and the staff are committed to managing the trust fund assets with the utmost care, professionalism and prudence.
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Military Veterans and Service Purchase

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Is there any chance State employees that are Military Veterans could ever get the maximum service (24 months) added to their years of service at NO charge?
Vested members of MSEP and MSEP 2000 are allowed to purchase prior active-duty military service at a subsidized rate. If you, or someone you know, is interested in doing so, we encourage them to call one of our benefit counselors. They would be happy to talk with you or anyone about individual circumstances and can provide cost estimates. For some perspective, however, during the 2010 special session of the legislature, that provision of the law was changed for those state employees hired on or after January 1, 2011. Those employees, who are members of MSEP 2011, may not purchase prior military service but may purchase prior public service at the full actuarial rate.*
That said, we don’t anticipate any change in the near future that would allow state employees who are military veterans to receive their service at no cost to them. That kind of change would require legislation, and so, to that end, you should contact your representatives in the Missouri House and Senate. They can be found by entering your home zip code at this link.
*Note: members of the MSEP 2011 may get automatic credit if they were employed by the state immediately prior to entering the armed forces and return to state employment within the timeframe specified by USERRA. However, purchase of prior active-duty military service credit is not available to members of MSEP 2011.
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Retirement Subsidy for Health Insurance

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Is there any way to encourage our legislators to increase the retirement subsidy for health insurance for retirees? I believe this is currently capped at 60%, regardless of years worked. 
The Missouri State Employees’ Retirement System (MOSERS) administers retirement, long-term disability and life insurance benefits for our members. Health care is managed by the Missouri Consolidated Health Care Plan (MCHCP), so we aren’t the right people to answer your question. 
We asked MCHCP to respond to your question. Their response follows:
The retirement subsidy for health insurance is currently capped at 65 percent. In 2001, the legislature recommended that the state utilize a service-based rate formula to determine the contribution amount for retirees. The contribution is subject to available state funds. State budgets have caused the MCHCP Board of Trustees to set the maximum at 65 percent. In order for the maximum to be increased, it would need to go through the state legislative budget process. Keep in mind that the state of Missouri continues to face difficult budget times and there have been significant cuts to the state workforce and programs so it has been very difficult to increase costs. 
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Pay Raise This Year?

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Will we receive a raise this year if not why? Each year we don't get a raise yet our insurance keeps going up.
We are unaware of any pay increase in the upcoming FY12 state budget. As you are probably aware, the state is wrestling with budget shortfalls and the administration and legislators just recently completed the process of working out the budget for next fiscal year and making difficult decisions about funding cuts. Any pay plan decisions are unlikely. The budget for Fiscal Year 2012 (that begins July 1, 2011) was passed by the General Assembly in early May and will finalized sometime in June.
We understand these are very difficult times for state employees. Please realize that while MOSERS administers retirement, life insurance and long-term disability benefits for state employees, we have no say over pay or raises for active employees. While we cannot control things related to the current economic environment like pay increases or the state budget, we can assure you that your retirement system is stable and promised MOSERS retirement benefits are secure.
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