Friday Top Five

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The Friday Top Five: A collection of the top five news articles, blog posts, or other retirement related information from the past week.

From the Pew Center on the States:  The Widening Gap Update

The latest Pew Center report, The Widening Gap Update, has led some people to conclude that the Missouri State Employees’ Retirement System (MOSERS) is in financial trouble and is not being properly funded.This is incorrect and MOSERS quickly responded with the truth.

From Ady Dewey at Pension Dialog: Capturing a Snapshot in Time

A response to the Pew Center's report, which discusses the dynamic nature of public pensions suggests that reports such as this are a snapshot in time and should be recognized as such.

More from Pension Dialog: The Why - and Fairness - of Public Pensions

This blog post is about why it's necessary and only fair that public employees be guaranteed a pension.

From Mark Miller in Reuters: COLUMN-Five things to consider before cutting pension benefits

Pensions are, no doubt, consuming a larger share of some state and local budgets. But - before we continue swinging the axe - here are five things to keep in mind about public sector pensions.

From The Best Life blog at US News & World Report: Four Mid-Year Resolutions for a Better Retirement

Some suggested adjustments that might improve your quality of life during retirement.

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Credited Service and Separation from Employment

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If you separate from one division for 2 to 3 weeks then hire on in a different division what if any benefits do you lose?
You will not earn credited service for any period of time your are not employed by the state or on a state approved leave of absence. Therefore, if you separate from one division of the state and do not go to work for another division for 2-3 weeks, you would not earn credited service for those 2-3 weeks you were not employed by the state.
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Applying for Retirement and BackDROP

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Is this a correct assumption - to receive any BackDROP monies you must be working when you apply for retirement benefits - could I quit my job then a year later request my retirement income and have the option to choose BackDROP monies?
To be eligible for the BackDROP option, you must have worked for at least two years past the first date you were eligible for normal retirement with MOSERS. You are required to be eligible but not actively employed at the time of your actual retirement (when you begin to receive money). However, you should carefully consider your individual situation to determine whether there is any advantage in waiting to receive retirement benefits, since your MOSERS retirement benefit would not grow during the time you would have been eligible but delayed receiving benefits.

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No Cause for "Serious Concern" With Regard to MOSERS

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Article in News Tribune dated 06.19.2012 "CAUSE FOR CONCERN" and 'serious concern' for Missouri stated that Missouri has failed to pay its full annual contribution from 2005 -2010. Although it is fully funded in the budget, has it been fully paid or as the article stated only partially paid?
Thank you for calling our attention to the article in the News Tribune. We have responded with this piece on our website. The statement, as originally stated in a recent report by the Pew Center on the States, that “Missouri failed to consistently pay its full annual pension contribution from 2005-2010,” is not correct with regard to MOSERS. The State of Missouri has, without exception, always funded MOSERS’ annually required contribution (ARC) at 100%.

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MOSERS Responds

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On June 10, we got an email from a Missouri citizen asking if MOSERS is in financial trouble and if MOSERS is experiencing problems similar to other states in regard to its funding level and liabilities.

The short answer to that question is no, MOSERS is not experiencing the problems in funding, liabilities, or credibility some other states are experiencing. The State of Missouri, without exception, has always funded the annually required contribution (ARC) at 100%. In other words, the view that the pension system should never sustain a shortfall in actuarially determined contributions has been systematically endorsed at all levels of authority over the years. The decisions made over the years by the MOSERS Board, the governors, and the legislators, have put MOSERS in a strong financial position. Our long-term investment strategies are designed to keep the plan affordable to the state and to keep promised benefits secure.

For comparison with our peers, we rely on a database consisting of information from 70 statewide public employee defined benefit pension plans. The following compares our results to the average performance of those funds for various time periods ended December 31, 2011:

MOSERS


Peer Average


MOSERS Excess


Dollars Generated by Excess for Each $1 Billion at Beginning of Period

5 Years
3.88%

1.81%
2.07%


$115,813,994

10 Years
7.17%

5.39%
1.78%


$308,211,810

15 Years
7.52%

6.20%
1.32%


$501,856,940


With approximately $5.5 billion at the beginning of the 10-year period ending December 31, 2011, the value added by investment return above the average return was approximately $1.7 billion, (5.5 x $308,211,810), net of fees and investment expenses, which is currently saving the taxpayers of Missouri about $110 million annually in pension contributions.

The MOSERS Board of Trustees has adopted a routine process for formally reviewing all assumptions used by the actuary in determining what the annual contribution to the fund should be. The Board, in coordination with MOSERS’ actuary and our investment consultant, are in the process of examining these assumptions currently.

And earlier this week, the Pew Center on the States released its report: The Widening Gap Update, in which it stated, among other things, that Missouri's public pension systems are cause for "serious concern" because "the state has failed to consistently pay its full annual pension contribution  from 2005-2010." This, of course, is not true for MOSERS, and caused us some alarm. Turns out that the Pew Center lumps all Missouri's public pension systems together, and includes the cost of retiree health care, which is not even managed by MOSERS. So, we spent a considerable amount of time yesterday responding to this information. You can read our response on our website. Print Friendly and PDF

Friday Top Five

Posted on
The Friday Top Five: A collection of the top five news articles, blog posts, or other retirement related information from the past week.

From Leigh Snell at NCTR's Federal E-News: More Biggs Bombast

Snell summarizes Biggs' outspoken opposition to defined benefit public pension plans as well as those challenging his views, including the National Institute on Retirement Security (NIRS) and our own Gary Findlay, executive director of MOSERS.

From Ady Dewey at Pension Dialog: Having a Conversation About Retirement

This blog post is about the Canadian debate over the state of retirement readiness, but it might well have been staged in America.

From New America Media: The Great Retirement Squeeze

This article references several recent studies that paint a not-so-pretty picture of the future of retirement for many of today's workers. After reading this, MOSERS members should feel even better about being part of a secure defined benefit public pension plan.

From Pensions and Investments: Strapped state pension funds take scalpel to COLAs for relief

COLAs are under fire in many states (not for MOSERS members!) and this article lays out the where and why behind this unfortunate partial "remedy" to many states' fiscal problems.

From The Best Life blog at US News & World Report: Exercise is Key to Successful Aging

Smart retirees are staying fit, and demanding higher levels of physical fitness facilities and programs, as they realize the physical and mental benefits of vigorous exercise.

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Reemployment After Retirement

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Thank you for allowing me this time. My question is, is a pension a retired state employee receives affected if the retired employee also works? Thank you.
If you retire and work for any employer other than the state your retirement benefit will continue.  If you return to work in a benefit eligible position covered by MOSERS or the MoDOT and Patrol Employees’ Retirement System (MPERS), your benefit will be stopped.  Your employer determines if you are working in a benefit eligible position.


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