COLAs for beneficiaries

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Do those who are receiving benefits on a beneficiary account receive annual COLAs on their benefits?
Yes. MOSERS provides an annual COLA to retired members, surviving spouses, beneficiaries, and surviving children younger than age 21. See the COLA page on our website for more information.

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How Do Guaranteed Payments Work?

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Am very close to enrolling for my retirement Nov 1, 2014. Can you elaborate a bit on "guaranteed payments" ? Does that mean it will be paid to my estate in the event of my death until all payments are made ? or does it mean i would get set number of retirement checks and then benefit ceases?
 As the MOSERS member, you will receive payments each month for your life. The 60, 120 or 180 guaranteed payments refer to the minimum number of payments that will be made to you or to a beneficiary on your behalf. If you die PRIOR to receiving that number of payments, your beneficiary(ies) will receive whatever number of payments remain in the guaranteed period that you elected. At retirement, you must name a beneficiary or beneficiaries (person(s), trust, corporation, organization, charity, or your estate) to receive your final benefit payment from MOSERS and any remaining guaranteed payments (excluding any temporary benefit).

For example, if you elected Life Income with 60 Guaranteed Payments and lived for 24 months after retirement, your beneficiary(ies) would receive the 36 remaining payments. If you were to live 200 months beyond your retirement date, you would receive a payment each month for your life but, because payments would have been made in excess of the guarantee period, there would be no remaining payments to be paid to anyone else after your death (except the final payment for the month in which you die).

You should also be aware that, by electing a guaranteed payment option, your retirement benefit will be reduced. More information about the reduction factor can be found in the MSEP/MSEP 2000 General Employees’ Handbook and the MSEP 2011 General Employees’ Handbook on MOSERS’ website. You can generate your own retirement estimate that compares different payment options by going to the Secure Member Login and picking the Select a Date Estimate or you may request one from a benefit counselor by calling (800) 827-1063.

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Retirement and Life Insurance

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When a person retires, does the state provide them with 5000.00 worth of life insurance? it seems I read that somewhere at some point, but haven't been able to find it lately.
Yes, as a MOSERS benefit-eligible member, if you retire directly from active service you will have $5,000 of basic life insurance provided at no cost to you. Regardless of whether you elect normal retirement (unreduced benefit) or early retirement (reduced benefit), as long as you retire within 60 days of leaving state employment, the state will continue to pay for $5,000 of basic life insurance. Coverage is automatic; no forms are required.

If you wish to retain more life insurance coverage, you have 60 days from the end of the month in which you leave state employment to make an election to convert the remaining basic life insurance to an individual policy through Standard Insurance Company. Additionally, if you were enrolled in optional life insurance coverage on your last working day, you may continue some or all of that coverage into retirement. If you retire under the “Rule of 80” (MSEP 2000), or “Rule of 90” (MSEP 2011), you may retain all of your optional life insurance coverage until age 62. At age 62, your coverage will automatically reduce to a maximum of $60,000. If you terminated (or did not have any) optional life insurance coverage through MOSERS at retirement, it cannot be reinstated or added after retirement.

You can find more information in the MOSERS Basic and Optional Life Insurance Handbook on our website.

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Calculating Normal Eligibility

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Does the MOSERS website offer a member a way to determine what MOSERS has calculated as their normal retirement eligibility date?
Yes. You can create your own retirement estimate by logging into your secure Member Homepage. From the top menu, select Estimates, then Estimate Your Retirement Benefit. You will be shown your earliest eligibility date for normal retirement. If you would like to look at other options, you may enter an alternate retirement date below that.

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Friday Top Five: Retirement Related News for 7/25/14

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From AGEnda: How Social Security Reforms Could Affect Employers

Social Security payroll taxes are a major expense for employers and employees alike. Each party now must pay 7.65 percent on the first $117,000 of covered wage earnings, with that amount split between Social Security (6.2 percent) and Medicare (1.45 percent, with the proceeds going to the Medicare trust fund that pays for hospital expenses under Part A of the program).

These taxes are nearly universal in private workplaces and, increasingly, in government jobs as well. It’s easy to see them as an immutable cost of business, which over time becomes a forgotten fixed cost. The same is true for employees, especially younger ones.

From USA Today: People of all ages investing more for retirement

People of all ages — even young people — are saving more for retirement by making bigger contributions than ever to Individual Retirement Accounts (IRAs), a Fidelity Investments study out today shows.

Average IRA contributions for tax year 2013 increased 5.7% over the previous year and reached $4,150, an all-time high. Average balances are up almost 10% over last year to $89,100.

Overall, average IRA contributions for investors in their 20s, 30s and 40s are up 3.9%, 6.7% and 6.2%, respectively.

From BenefitsPro: Average worker needs to save 15% to fund retirement

A typical household needs to save roughly 15 percent of their income annually to sustain their lifestyle into retirement, according to a brief from the Center for Retirement Research at Boston College.

Generally, workplace retirement savings plans should provide one-third of retirement income, according to the study. For lower income families, defined contribution or defined benefit plans should provide a quarter of all retirement income. Higher income families will need their retirement plans to provide about half of all retirement income.

From MarketWatch: 6 ways a new tax law benefits a sustainable retirement

Every now and then the Department of the Treasury and IRS surprise us with taxpayer-friendly legislation that addresses pervasive retirement income planning concerns.

One of the most anxiety-provoking subjects that frighten many people more than death is the possibility of outliving one's assets. Recognizing this issue, the Department of Labor, the IRS, and the Department of the Treasury began soliciting feedback in early 2010 about the possibility of including advanced-age lifetime-income options in retirement plans. To make a long story short, the Treasury and IRS finalized a regulation in the beginning of July that enables retirement plan participants to invest a portion of their plans in "longevity insurance."

From Wealth Management: IRA Contributions: The Perils of Procrastination

Individual Retirement Account contributions are getting larger - an encouraging sign of a recovering economy and improved habits among retirement savers.

But there is an "I" in IRA for a reason: investors are in charge of managing their accounts. And recent research by Vanguard finds that many of us are leaving returns on the table due to an all-too-human fault: procrastination in the timing of our contributions.

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Remarriage and Survivor Benefits

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When a member dies and their wife gets her pension, and she remarries. Will she lose her pension she gets from her first husband.
No, the member’s spouse will not lose the survivor benefit. Survivor pension benefits are available for members who elected a joint & survivor benefit payment option at retirement. The benefit will be payable for the remainder of the surviving spouse’s lifetime, regardless of remarriage. (Different provisions apply if the member dies prior to retirement – see your member handbook.)
For more information about survivor benefits, please see the Survivors section of the MOSERS website.

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Retirement Eligibility

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When Mosers says your retirement date, is it referring to DMH 80 & Out or your Social Security retirement age of 66 years?
Your MOSERS retirement eligibility is not connected to your social security retirement eligibility,

In regards to our BackDROP article on the website, your MOSERS normal retirement date is the date at which you can retire with an unreduced MOSERS benefit whether or not you elect the BackDROP (if you elect early retirement from MOSERS, your MOSERS benefit would be reduced). Once you reach your normal retirement date, you can retire from MOSERS any month thereafter and receive full MOSERS benefits. However, in order to be eligible for the BackDROP, you must continue working in a MOSERS benefit eligible position at least two years beyond your normal retirement date. The Rule of 80 (“80 & Out”) is one way to qualify for normal retirement for eligible members of the MSEP or MSEP 2000. It would be the “Rule of 90” for members of the MSEP 2011. The Rule of 80/90 is not the only way to reach MOSERS normal retirement eligibility. Below is a table showing other normal eligibility options. Whenever you have first attained both the age and service required, that is your first normal retirement eligibility date from MOSERS*. 

Normal Retirement Eligibility - Age and service required to receive an unreduced retirement benefit (DB)


MSEP 2000

MSEP 2011

  • Age 65 and active with 4 years of service
  • Age 65 with 5 years of service
  • Age 60 with 15 years of service
  • “Rule of 80” - at least age 48 with age and service equaling 80 or more
  • Age 50 if first became eligible prior to Aug. 28, 2003
  • Age 62 with 5 years of service
  • “Rule of 80” - at least age 48* with age and service equaling 80 or more
*Age 50 if first became eligible prior to Aug. 28, 2003
  • Age 67 with 10 years of service
  • “Rule of 90” - at least age 55 with age and service equaling 90 or more

If you are uncertain of your plan membership, see “Which Plan Am I In?” or contact a MOSERS benefit counselor.

*Different provisions apply to legislators, statewide elected officials and judges.  Please see your member handbook for more information. 

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Friday Top Five: Retirement Related News for 7/18/14

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From St. Louis Post Dispatch: Workers who neglect their retirement neglect their health, too

Warning: Failing to save for retirement may be hazardous to your health.

OK, that isn’t strictly true, but a cigarette-package-like warning might be the only way to get some nonsavers’ attention. And, according to a new study by two Washington University researchers, there really is a link between financial and physical health.

From Metrofocus: The State of Public Pensions in New York and New Jersey

Public pension payments often make up a huge portion of state budgets*. At the end of fiscal year 2013, New York State paid $9.5 billion into its pension funds – a little over seven percent of the total state budget. New York City paid $8.06 billion into its pension funds – more than 11 percent of the city’s total budget. For the upcoming fiscal year, New Jersey Governor Chris Christie decided to cut $887 million from the state’s required pension payment. It was a controversial move that was ruled constitutional by a New Jersey Superior Court judge because the governor was “backed into a corner.”

*Note: MOSERS’ appropriation for state employee pension funding is 1.2% of the Missouri state budget. The State of Missouri has consistently funded 100% of the annually required contribution (ARC) as determined by the system’s independent actuary.

From Forbes: Millennials Save For Retirement Earlier Than Baby Boomers, Survey Finds

All of those reports encouraging Millennials to start saving for retirement as soon as possible may be paying off, literally. According to the 15th Annual Transamerica Retirement Survey, performed by the nonprofit Transamerica Center for Retirement Studies, Millennials are an “emerging generation of retirement super savers,”  with 74% starting to save for retirement at an “unprecedented” median age of 22, or 5 years sooner than Gen Xers and a staggering 13 years sooner than Baby Boomers.

The survey focused on the retirement habits and trends of Baby Boomers, Gen X and Millennials who are currently working full- or part-time in a for-profit company of 10 or more people.

From Defined-benefit pensions are not against liberty or the poor: guest opinion

Defined benefit pensions are not anti-poor, regardless of recent claims at by Scott Beaulier, director of the Manuel H. Johnson Center at Troy University.  In mid-May, Beaulier's organization released a study alleging that the Retirement Systems of Alabama faces a large funding gap that the state underestimates.  The center's report was countered by the RSA's chief lawyer in an argument depicting the Johnson Center report as "inaccurate and misleading."

The July issue of the RSA's monthly newsletter rebuts the Johnson Center claims regarding the retirement system.  However, it leaves unaddressed Beaulier's arguments that defined pension plans are anti-poor.  In his June 26 essay Beaulier argues that people with more education and income live longer than those with less.  Thus, longer-lived Alabamians draw larger benefits from defined benefit plans than do those with shorter lives.  This is hardly rocket science, as higher education and income are positively associated with prudent lifestyle decisions and opportunities.  One would think that most Alabamians support plans that reward prudence and healthy lifestyles.

From Forbes: Five Things Young People Get Wrong About Life In Retirement

It’s not uncommon to hear that ideas and concepts surrounding retirement are changing, but what’s interesting is that it hasn’t trickled down to younger generations who think retirement is a death sentence best served in a rocking chair.  Here are five examples to help young people change their perspective on life in retirement.

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A Two-Part Question

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1- What is this Fiscal Year's % of reserves to obligations?
In terms of system assets relative to the value of liabilities, during the year ended June 30, 2013, the funded ratio of the Missouri State Employees’ Plan, was 72.7%.  The FY14 actuarial valuation is currently in process and that information will be completed and presented to the board in September. We will post that information to our website once it has been finalized.
2- With the new retirement plan, if an employee contributes their 4% for 9 years and then retires before vesting, do they get any return?
If you are an MSEP 2011 member who leaves state employment prior to becoming vested, you are not entitled to a future retirement benefit. However, as a member of the MSEP 2011, you may leave your contributions with MOSERS if you think you may return to state employment in the future. Interest will not continue to accrue on your contributions if you terminate employment prior to becoming vested. You may request a refund of your contributions only if you are no longer working in a MOSERS benefit-eligible position. As a member leaving a MOSERS-covered position, you have a number of options available for managing your pension assets. You may:
  • Option 1 - Leave your contributions with MOSERS (if you expect to return to a MOSERS-covered position.)
  • Option 2* - Rollover the total amount of your contributions plus interest into an IRA or qualified retirement plan.
  • Option 3* - Elect a combination rollover and cash payment (less applicable mandatory withholdings and IRS penalties).
  • Option 4* - Request a full refund (less applicable mandatory withholdings and IRS penalties).
Please see the Member Contributions (MSEP 2011) brochure on our website for more information.
* Please Note - By receiving a refund you forfeit all your credited service and any future rights to receive benefits from the system.

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HB5 and State Matching

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I heard that the bill passed to on the retirement plan to match up to $75.00. Is this true?
The short answer is that state funding is currently not available for theemployer incentive (match) associated with the State of Missouri Deferred Compensation Plan.

Here is  a bit more detail: Funds were appropriated in HB 5 for the payment of incentive match funds by the state in the amount of $25 per month for eligible employees who contribute at least $25 per month to deferred compensation and HB 5 was passed by the legislature. However, state funding for the match was withheld. This means that the funding for the incentive is not available in the Fiscal Year 2015 budget that began July 1, 2014. Generally speaking, withheld or "restricted" funds may be restored to the state's budget later in the fiscal year as deemed appropriate. For more on this budget action, view Gov. Nixon's press release.
Stay tuned to the Plan's website and social media channels (Facebook, Twitter, LinkedIn and YouTube) for more information as it becomes available.
Also, we recently answered a similar Rumor Central question about this topic. You can read our response here.

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Real Retirees: James Broadfoot

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James Broadfoot retired from the Missouri Department of Natural Resources on March 1, 2014. In preparation for his retirement, Mr. Broadfoot sent these pieces to MOSERS from November 2013 to January 2014. A biography and reflection on his upcoming retirement were included in the summer issue of RetireeNews.

November 2013

I am grateful to the State of Missouri for giving me a 26-year career, with all the little warts included.  The first 14 years I spent in social services were very tough, dealing with child protection issues, etc.  I have four children of my own, which I brought up, now all out of college and working.  I had to wear two hats, my personal family-oriented hat and a frosty professional hat for work.  Mostly, it has been a pleasure to spend 26 years of my life with our great state.  Above all, I am grateful that the leaders of Missouri have kept our economy as strong as possible and better than most other states.

I attached the photo (below) taken off my deck, over the Osage River, about 10 miles east of Jefferson City.  This vantage spot is where I already spend a lot of quality time.  It is a good place to think.  Plenty of fresh air and good place to visit, to read, to write, to paint, to listen to music, etc.  Also, the trees give free shade, facing the west and back towards Taos, Missouri.  The Sanning farm across the river from my property is one of the most fertile in the world, surely.  Thanks to the Bagnell Dam, built in the 1930’s, the Osage River never (almost never) floods out.  Now, occasionally, the Missouri River will back water over a small portion of the Sanning Farm.  This farm produces excellent and consistent crops, from wheat to corn to soybeans.  I like to look at this great farm across the river; it is an artwork in constant motion.  I have a million dollar view and a five hundred dollar old house.  A perfect fit. 

So, thanks to MOSERS and the Social Security Administration, I can enjoy a comfortable retirement.  This is as good as it gets.

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Health Care at Retirement

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By submitting retirement application, do I thereby lose my Active Missouri State Employee Medical Insurance coverage?
Filling out a MOSERS’ retirement application will not affect your healthcare coverage.  Active, terminated vested, and long-term disability subscribers who wish to continue participation in an MCHCP plan into retirement should contact MCHCP at 800-487-0771 for assistance or you can read more about MCHCP’s retirement process and find a checklist through theirwebsite.

Additionally, as a retiree, you may be eligible for Medicare. All Missouri residents have access to CLAIM, a nonprofit that will provide free, unbiased information about Medicare. You may call them at 1-800-390-3303, and a staff member will take your question, name, and number. Then a local CLAIM-certified counselor will call back to help answer your questions about program options, premiums, and how to enroll.

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Friday Top Five: Retirement Related News for 7/11/14

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From Investment News: Missouri bars pension advances for public workers

Missouri's governor Jay Nixon on Tuesday signed a law that made it the first state to bar pension advances — a practice wherein retirees are offered a lump sum in exchange for signing over all or part of their income stream — for public workers.

“This practice is bad for consumers. It preys on a vulnerable population, and it's bad for retirement security in general,” Missouri's Treasurer Clint Zweifel, who championed House Bill 1217, said in an interview.

From Financial Advisor: Cost Of Retirement Savings Not Increasing For Everyone

The bad news is the cost of saving for retirement is going up. The good news is some pre-retirees are now on track to replace more of their pre-retirement income in retirement, according to data from BlackRock released Wednesday.

BlackRock based its conclusions on its CoRI index, which was launched a year ago, on information from the Employee Benefit Research Institute (EBRI) and on the actuarial data used by the Social Security Administration to make its projections, Chip Castille, head of the BlackRock U.S. retirement group, said during a web conference Wednesday.

From The StarPhoenix: Defined benefit pension plans offer level of certainty

Do you belong to a defined benefit (DB) employer pension plan? If so, do you know how much money you will receive each month when you retire? Is there a bridge benefit available for the years before you turn 65? DB plan benefits are defined by a formula based on the number of years of service and salary levels. As a simple example of a DB formula, multiply two per cent times 20 years of service times $50,000 average salary to give a lifetime pension of $20,000 per year.*

DB plans offer certainty for the employee. The employer bears the risk of paying the benefit promised by the formula.

*MOSERS' pension formula is .20 years of service times a final average salary of $50,000 times a multiplier of 1.7% for members of MSEP and MSEP 2011. For members of MSEP 2000, the multiplier is 1.6%.

From BenefitsPro: Entering a new era of active retirement

There’s been a spate of stories about the “retirement crisis” and the “failure of the 401(k).”

The reality is more and more people are working in their retirement. Yes, some of them are doing so because they have to, but a surprising number are doing so even if they don’t need the money or the benefits. In either case, it might make sense for plan sponsors to educate their employees about what to expect in this new, modern retirement.

From Heartland Connection: Are you on the right track to retirement?

A recent study revealed that Americans are falling behind in saving for retirement. Only 43% of U.S. workers reported having savings and investments that total over $25,000. David Bethel, partner with Financial Planners of Missouri, stopped by the set of Good Morning Heartland to tell us more on what we need to know about our retirement.

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HB1217 and BackDROP

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Please comment on what the recent Pension Bill HB1217 means. Specifically will it impact back drop payments?
A summary of the bills affecting MOSERS during the 2014 legislative session (including HB 1217) has been posted to our Legislative page. Your email is also being forwarded to a benefit counselor, who will be able to answer the portion of your question about BackDROP and how it may affect your specific situation.

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Unpaid Vacation Leave

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If I have unpaid vacation leave, must it be taken before retirement or can it be taken after retirement?
You have the option to either use your annual leave before retirement or your agency will pay you for any unused annual leave. By law, your unused vacation pay is not considered in calculating your MOSERS retirement benefit and is paid by your employing department. Under the regulations that govern annual leave, state employees may be paid for up to their maximum allowable accumulation of annual leave. Please contact your agency’s human resources representative to determine your agency's procedure for using annual leave prior to retirement or for paying out unused annual leave.

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Changing Tax Deductions

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how do i change the amount of deductions an change the account my benefit goes?
To change either your federal or Missouri state tax withholdings, you may complete a Substitute W-4P form and submit it to MOSERS at any time.

If you do not choose a federal tax withholding option, MOSERS is required by law to withhold federal taxes as if you elected married with three allowances. This form will replace any previous Substitute W-4P form that is currently on file with MOSERS.

If you are signed up for direct deposit of your benefit and wish to change bank accounts, you must complete and submit a new Direct Deposit/Pay Card Authorization form. Keep in mind that if your direct deposit account is closed too soon, the financial institution will return your direct deposit to MOSERS causing your benefit payment to be delayed. Therefore, keep your initial direct deposit account open until the end of the month after you make a change.

Both of these forms can be completed online by logging into your secure Member Homepage or printing them off from MOSERS’ Forms page

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Friday Top Five: Retirement Related News for 7/4/14

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 Unions are lauding a state appeals court ruling that retired public workers have a right to cost-of-living increases in their pensions.

A three-judge panel on Thursday left it to a lower-court judge to decide whether the state had proper justification for suspending those hikes as part of a 2011 pension system overhaul.

Can replacing a pension plan with a 401(k) hurt the career paths of younger workers and cause stagnation among more senior employees?

Yes, according to a study by a Mercer partner who looked into how the switch to 401(k)s has changed retirement thinking for employees.

The state is expected to cut 263 full-time positions statewide and another 23 new positions in the new fiscal year, as part of Missouri Gov. Jay Nixon’s announced cuts to the 2015 budget.

Last week, Nixon announced the vetoing or freezing of more than $1.1 billion of spending in the state’s next budget, including eliminating a total of 286 state positions, withholding the funds for a planned 1 percent pay increase for state employees and vetoing the funds for a salary commission study.

Any person that is suddenly unemployed or plans to leave their job for another position needs to be careful with any retirement benefits built up through their current employer according to Nellie Lamers, a family financial education specialist with University of Missouri Extension.

“Ask your human resources director for the company’s summary plan document. That document will tell you how your benefits are calculated, when you become vested, when you may receive your benefits, and in what form,” said Lamers.

Women live longer than men, on average. And that's mostly a blessing.

But, as with a lot of things, it could be somewhat problematic in retirement. Here's why.

The fact is, women face a unique set of issues that may require a somewhat different approach to financial planning.

MOSERS offers Money Matters workshops which are designed for employees who want to know more about managing their finances and they are available by special request through individual departments. Those interested should visit with HR staff who may schedule a workshop onsite.

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Has the state match for deferred comp been funded?

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I was wondering if DOC was going to start matching employee retirement contributions again?
Funding for the reinstatement of the employer incentive (match) program associated with the State of Missouri Deferred Compensation Plan has been withheld from the FY15 state budget at this time. You can read Governor Nixon’s press release on the budget vetoes here.

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Retirement and Annual Leave

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After retirement, when do I receive pay for my annual leave?
The agency for which you work will pay you for any unused annual leave (limits may apply).  Contact your human resources representative to determine your agency's procedure for paying out unused annual leave. MOSERS does not have a role in this process.

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