Is MOSERS Going to "Run out of Money?" No!

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Two Rumor Central questions that we've received are similarly themed:>
Question 1: Hello, I am retired and I saw on the news last night (Fox) where a number of states employee pension plans are in trouble. They talk about that a lot but what was different last night was that Missouri is now on the list. I'm conservative and I know that MOSERS over the years did a pretty good job of investing our money. Of course they had a fellow on saying that the states would have to cut benefits, not raise taxes. Is there any truth to this report? Question 2: Please provide me with the information regarding a statement in the news that the State of Missouri will be out of money for retirees in 2021. Thank you.
Background on the media reports

Recently, the Center for Retirement Research published an issue brief which included theoretical “run-out dates” for 126 public pension plans, including MOSERS. The purpose of their issue brief was to illustrate the effect of proposed changes to accounting standards for the valuation of assets and liabilities of public pension plans.  Unfortunately many media outlets have been circulating these “run-out dates” without regard to the rest of the brief.  As noted in the conclusion of the brief:

“It would be unfortunate if the press and politicians characterized these new num­bers as evidence of a worsening of the crisis when, in fact, states and localities have already taken numerous steps to put their plans on a more secure footing.”


Unfortunately, that characterization is exactly what has happened.  The theoretical “run-out date” of 2021 is inaccurate and irrelevant.


Your concerns are understandable given all of the local and national negative press regarding public employee retirement systems that we have seen since the “great recession” began in 2008.  The most important message we have is to assure you that your benefits are secure.


The two most important factors in assuring that the plan is financially sound are that the contribution rates be based on reasonable assumptions about the future and that the contribution amounts computed by the actuary actually be contributed by the employer. The MOSERS’ actuary conducts an experience study every five years for the purpose of determining if any fine tuning to the assumptions is warranted – such an experience study will be presented to the MOSERS’ board  of trustees in March and the board will determine whether or not changes should be made prior to certifying the contribution rate in September.  Regarding contributions, without exception, the state has made the annual required contributions, as determined by the actuary.


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2 Questions: Survivor Options and BackDROP

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Two questions: 1. When I retire, if I elect 100 or 50% survivors for my spouse, what happens to my benefits should I outlive my spouse? 
2. If I am 5 years past 80 & out but elect to stay with the state until age 62, would I still be able to choose backdrop as an option? 
If you elect the Joint and 50% or 100% survivor option and your spouse precedes you in death, your benefit will revert (pop-up) to the life income annuity amount the amount before a survivor reduction. The effective date of the pop-up will be the first of the month following your spouse’s date of death. The pop-up is not automatic. You must provide MOSERS with a photo copy of your spouse’s death certificate before your benefit will be adjusted. If you then remarry and choose to elect one of the survivor benefits for your new spouse, you must do so within one year of your date of marriage.
BackDROP is available for members who continue to work at least two years past their first eligible date of retirement. If you are first eligible to retire because of 80 & Out, we will use that as your official first date eligible. Any time you work past that date could be considered in figuring BackDROP.
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Reemployment After Retirement and Your Pension

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A coworker retiree tells me that he is allowed to work only a certain number of hours per year (50%) because if he works more, his pension will stop. Please clarify.
If you retire and later return to work for the state of Missouri, in a benefit-eligible position covered by MOSERS, your retirement benefit will be stopped. Your employer determines if you are working in a benefit-eligible position.

A benefit-eligible position is one that is permanent and normally requires the performance of duties during not less than 1,040 hours per year. If you return to work for the state in a benefit-eligible position:
  • Your monthly retirement benefit from MOSERS stops for ANY month which you are actively employed in that position.

  • You will accrue additional service credit for periods of reemployment greater than 12 months.
When you retire again, your benefit will be equal to the monthly benefit you were receiving PLUS an additional monthly benefit for the service earned during reemployment periods of 12 months or more.

Working for the state in a position that is not deemed benefit-eligible does not have any impact on your eligibility to continue receiving a retirement benefit. You may work in that position and receive a retirement benefit from MOSERS. 

If you have a question about whether or not a position will affect your retirement benefit we advise you to check with your employer.

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Pay Raise for Active State Employees?

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It's wonderful that retirees are getting a COLA but what about a raise for active employees? Thank you.
The FY13 budget as introduced by the Governor includes a 2%, across-the-board pay raise for state employees starting January 1, 2013. That budget still has to make its way through the appropriations process, during which changes can occur. The FY13 budget will be final in May 2012.
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Salary Changes and BackDROP

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If one gets promoted, demoted or otherwise has a pay change after their 80 and out date does it change their time table for back drop?
Pay changes do not affect the “timetable” for becoming eligible for BackDROP.  They may, however, affect the amount of your benefit.  In order to understand those implications, you are encouraged to contact a benefit counselor for answers specific to your situation. You may do so during our normal business hours by calling 800.827.1063, option 4.
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HB 1139 - Retirement Incentive Eligibility (2012)

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I am eligible for retirement through the 80 and out incentive on August 1, 2013. In reviewing HB1139, could I be eligible for this incentive or would I have to be eligible prior to March 2013?
We generally don’t speculate on eligibility on proposed legislation since it will most likely change over the course of the session. Should the incentive as it is written be passed by the legislature, MOSERS would confirm your eligibility for retirement at the time, should you be interested in taking the incentive. In the event of the bill’s passage, MOSERS will be sure all members who are eligible are aware of their eligibility and time frames involved. Keep in mind that many changes can take place during the legislative session that doesn’t end until May. We encourage you to monitor actions that are taken on it. See this recent Rumor Central post for important links.
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HB 1139 - Retirement Incentive (2012)

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Just reading Rumor Central regarding early retirement incentive legislation and there is actually a bill out there right now, HB 1139. Looks to be pretty similar to the bills proposed the [past] few sessions.
That is correct. HB 1139 was introduced on January 4, 2012 by Rep. Gatschenberger. There is currently no hearing scheduled and the bill is not currently on a House calendar. We encourage you and anyone who is interested in this bill to monitor actions taken on it through the Missouri Legislature’s House and Senate Joint Bill Tracking System. This tracking site will include any revisions to the introduced bill if it moves through the process. 
The Joint Committee on Public Employee Retirement Systems (JCPERS) also posts their legislative tracking sheet online. It lists all retirement bills for all systems. 
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The MOSERS Investment Portfolio (MIP) Fund

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Awhile back, we received this question: Now that the Board established a trust fund, when will deferred comp members be able to invest in MOSERS?
MOSERS has been structured as a trust fund since its inception. That has not changed. What you may be referring to is that in 2007 MOSERS assumed oversight of the State of Missouri Deferred Compensation Plan. The MOSERS Investment Portfolio (MIP) fund will be a monthly (rather than daily) liquidity investment option available to participants in the State of Missouri Deferred Compensation Plan. This fund will offer participants the opportunity to purchase units of the MOSERS investment portfolio. Staff is currently working with the record-keeper and custodian on the logistics associated with offering this type of monthly unitized option. We expect the fund to be available during the first part of 2012. When an official live date is determined, participants will receive notification and additional information via the plan website at www.modeferredcomp.org and the plan’s quarterly newsletter - Simply Put
More recently, we received this question: Do you have any additional information on the investment option described.
The response to the follow-up question is below:
We are still waiting on a definitive “live” date confirmation, but we expect that it should be live by the end of the second quarter, assuming that all programming/testing goes as planned. Assuming this timing, Plan participants will see communications on the fund in the first quarter newsletter (which will accompany the March 31st statement) and on the plan website (www.modeferredcomp.org) in April.
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Retiree Survivor Benefits and COLAs

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Will MOSERS Retiree Survivor benefits also go up by 3.6% as Social Security is doing in January? When does MOSERS give COLA raises?
Social Security benefits are separate from MOSERS and do not impact the benefit you receive from us. As defined by Missouri state law, the MOSERS annual Cost of Living Adjustment (COLA) rate is equal to 80% of the percentage increase in the average Consumer Price Index (CPI-U) from one year to the next , as established by the federal government. The COLA rate for 2012 will be established later this month. COLAs occur on the anniversary of your retirement date, however, if you converted from the MSEP to the MSEP2000, then your COLA anniversary date is July 1. For more information on COLAs, please review the COLA section of our website. Print Friendly and PDF

Survivor Benefits

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If I choose Joint & 50% or 100% survivor when I retire, what happens if my spouse does NOT outlive me?
If you choose a joint survivor option at retirement, and you’ve taken a reduction on your monthly benefit to provide that benefit to your spouse, if your spouse precedes you in death, your benefit would then “pop-up” or revert back to the life income annuity amount.
For more information regarding survivor benefits, please review the “survivor” section of our website.
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Missouri Public Pension Exemption

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I have heard from recent retirees that starting in 2012 there will not be any taxes deducted from my retirement check, is this correct or if it is not, what could they be talking about?
>You might be referring to the Public Pension Exemption. We ran a story about it in our 2010 Winter Newsletter. Another story about it is in our 2011 Winter Newsletter. Print Friendly and PDF

Purchasing "Air Time" Service

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I've heard about "air time", i.e the option to purchase service. I'm aware of the option to purchase certain types of service but "air time" is different. Does MOSERS currently have this provision in place?
Presently we do not have any provision in place allowing for purchase or transfer of "air time." Our provisions allow for the purchase transfer of active military service and public employment within the State of Missouri.
For those who are unaware, "air time" means a person just wants to buy service – service not tied to any actual service performed in another organization.  There is no provision in Missouri state law that allows a person to buy service that is not tied to military or other public service.


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2012 Retirement Incentive?

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I know it is early, but are there any legislative proposals for retirement incentive in 2012?
The 2012 legislative session starts January 4, 2012. There have been no formal bills filed on a retirement incentive at this time. We encourage you to monitor legislation as it is introduced and moves through the legislative process by visiting the Missouri House of Representatives and Missouri Senate websites.


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COLAs and the Select-A-Date Retirement Calculator

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When using the "select a date" retirement calculator, and projecting a retirement date into the future, do you apply a COLA or other increasing factor to the current salary for the intervening years, or is it projected that one will remain at one's current salary throughout that time?
When you log into the Secure Member Area of our website and use the “Select a Date Estimate” function, the monthly benefit amount you are first given does not take into consideration any future COLA increases you may receive.

To see what your benefit might look like with COLA increases, the system gives you the chance to project your future benefit with COLA increases if you wish. Once you select your retirement date and are on the screen with your monthly benefit amount, simply click on your choice of survivor options from those given and hit “Project COLAs.” You will then be asked to select the COLA rate you wish to use from a drop down box. (MOSERS typically uses the average of 2.0% when projecting future amounts for members, however the actual COLA rate is different each year and not known until mid-January.)
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