Post-Dispatch Article

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We recently received two Rumor Central questions regarding the May 29th Post-Dispatch article:
I was wondering if you could explain the May 29th, 2017, article in the St. Louis Post-Dispatch. It stated that should Gov. Greiten sign into law legislation that was recently passed the following would occur: MOSERS would be placing "new restrictions on using accumulated unused sick leave in calculating a pension payout." I have quite a bit of unused sick leave. Can you tell me how this would impact me and others in my situation? The article stated: "If signed into law, the changes outlined in the legislation will go into effect on January 1, 2018." If this change would have a tremendous impact, it sounds as though some of us might want to think about retiring before January 1st.
In the event that the Governor signs SB 62 what effect does the following statement have: MOSERS is placing new restrictions on using accumulated unused sick leave in calculating a pension payout. This was included in the story in the St.Louis Post Dispatch. I have not seen it anywhere else.
The provisions in SB 62 have NO impact on members of MSEP or MSEP 2000. Additionally, other than to reduce the vesting period from 10 years to 5 years, the provisions of SB 62 have NO impact on members of MSEP 2011 who work in a MOSERS benefit-eligible position until they reach normal retirement eligibility.

Effective January 1, 2018, only members who meet both of the conditions below will NOT have service credit granted for unused sick leave:
First hired in a benefit-eligible position on or after January 1, 2011 (member of MSEP 2011) and
Left state employment with a vested retirement benefit but prior to reaching retirement eligibility.

We refer to these members as “terminated-vested” members of MSEP 2011. (Similarly, terminated-vested members of MSEP do not receive service credit for unused sick leave if they left state employment prior to retirement eligibility, either normal or early.)

In contrast, all members of MSEP, MSEP 2000, or MSEP 2011 who retire directly from active employment receive service credit for unused sick leave. Every block of 168 hours of unused sick leave equals one month of service credit. Unused sick leave is used in calculating the amount of the benefit but does not factor into reaching retirement eligibility.

Note: Other “offsets” in SB 62 which contribute to making the vesting reduction cost neutral include the following for terminated-vested members of MSEP 2011 only, effective January 1, 2018:
Cost-of-living adjustments (COLAs) will be applied on the second anniversary of retirement (rather than the first anniversary).
If such a member dies prior to retirement eligibility, survivor benefits are not payable until the member would have reached their retirement eligibility age (rather than right away).


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Legislation & MSEP 2000 Members

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How does SB 62 affect MSEP 2000 employees?
If approved by the Governor, SB 62 will only affect members of the MSEP 2000 who are or who become terminated-vested* within the window decided upon by the board.

Below is a summary:

•       The legislation gives the MOSERS Board the authority to establish and offer a buyout program to terminated vested members in lieu of retirement annuity benefits otherwise payable – but it does NOT require the board to do so.
•       Members who make an election to accept such a buyout will forfeit their credited service and, if they return to state employment, will be considered a new employee.
•       The authority for the board to establish such a program ends 5/31/2018.

The vesting requirements for members of MSEP 2000 or MSEP will not be changed.

MOSERS will provide more information via our website and social media when the Governor acts on this legislation. Please ensure that both your email and mailing address are up to date with MOSERS so that you will receive important information from us if you are affected by any new legislation.

*A terminated-vested member is someone who has left state employment but has enough service to qualify for a pension benefit in the future once they also reach the age requirement for retirement.

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SB 62 Provisions

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Will this below effect those that have been working for 4 yrs now under the 10 yr vested .. and were hired in with these benefits or will we get to keep these or is this for everyone straight across the board. see below :
  • They are not eligible to receive service credit for any unused sick leave.
  • If they die prior to normal retirement eligibility, benefits will not be payable to their survivor until the member would have become eligible for normal retirement.
  • They will not receive a cost-of-living adjustment until the 2nd anniversary of their retirement.
The 3 offsets you listed that are contained in SB 62 affect only MSEP 2011 members who leave state employment after becoming vested (but prior to attaining retirement eligibility). If you continue in active employment in a benefit-eligible position until you meet the age and service requirements for retirement under the MSEP 2011, these provisions will still apply to you.  

Eligibility for benefits for any MSEP 2011 member who has already or who will terminate employment before the effective date of the bill (January 1, 2018) is based on the laws in effect on that person’s termination date*

The Governor has until July 14 to approve or veto legislation. MOSERS will provide more information via our website and social media when the Governor acts on this legislation. Please ensure that both your email and mailing address are up to date with MOSERS so that you will receive important information from us if you are affected by any new legislation.

*Termination date is your last day of work in a MOSERS (or MPERS) benefit-eligible position, as reported by your employer.

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Pension-Related Legislation

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 We recently received two Rumor Central questions about pension-related legislation: 
Are you going to summarize the actual pension changes enacted by the legislature during the current session? And when will the summary be available?
I heard that the retirement vesting time has changed for FTE MOSER-eligible employees from 10 years to 5 years, effective Jan. 1, 2018. Any truth to that?
Yes, it is true that the legislature changed the vesting requirement for MSEP 2011 members, pending Governor Greitens’ approval. The Governor has until July 14 to approve or veto legislation. The Missouri House and Senate Truly Agreed and Finally Passed (TAFP) HCS SS SB 62 on May 11th. If signed by the Governor, the 10-year vesting requirement for MSEP 2011 members will be changed to 5 years. In order to do this, policy makers had to provide “offsets” so that the change would not increase costs for the state. To that end, the following offsets apply to new terminated-vested MSEP 2011 members*:
•       They are not eligible to receive service credit for any unused sick leave.
•       If they die prior to normal retirement eligibility, benefits will not be payable to their survivor until the member would have become eligible for normal retirement.
•       They will not receive a cost-of-living adjustment until the 2nd anniversary of their retirement.

The same bill also contains language authorizing a pension buyout to terminated-vested members. Below is a summary:

•       The legislation gives the MOSERS Board the authority to establish and offer a buyout program to terminated vested members in lieu of retirement annuity benefits otherwise payable – but it does NOT require the board to do so.
•       Members who make an election to accept such a buyout will forfeit their credited service and, if they return to state employment, will be considered a new employee.
•       The authority for the board to establish such a program ends 5/31/2018.
•       If the MOSERS Board establishes a buyout program, it is anticipated that we will send packets to eligible terminated-vested members in September 2017.

MOSERS will provide more information via our website and social media when the Governor acts on this legislation. Please ensure that both your email and mailing address are up to date with MOSERS so that you will receive important information from us if you are affected by any new legislation.

*A terminated-vested member is someone who has left state employment but has enough service to qualify for a pension benefit in the future once they also reach the age requirement for retirement. 

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MOSERS 2018 Funding

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We recently received two questions on this topic:
Was MOSERS fully funded for 2018?

Does the budget that the legislature passed and sent to the governor contain an appropriation for the full amount requested by MOSERS to fully fund the retirement system?
Yes, the budget committee agreed to fully fund MOSERS’ budget request for FY18. The appropriations bill was Truly Agreed to and Finally Passed and sent to Governor Greitens on Thursday May 4th.

For background information about our funding, see the Rumor Central posts Appropriations for Pension Funding  from February and FY18 Funding for MOSERS from March.

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Proposed Legislation for MSEP 2011 Members

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My question is in regard to SB 333 and HB 729. I am currently a member of MSEP 2011 and have 4 years and 8 months of service time. If these bills pass and are signed, will I become vested in 4 months or will I become vested after 5 more years of service? Thank you.
As currently written, if House Bill 729 &/or Senate Bill 333* pass, the vesting period will be reduced from 10 to 5 years of service, effective January 1, 2018, for current and future active members of MSEP 2011 (those members first employed in a MOSERS or MPERS benefit-eligible position on or after January 1). So, in your particular case, if this legislation were to pass and you are still employed, you will become vested on January 1, 2018.

Eligibility for benefits for any MSEP 2011 member who has already or who will terminate employment before the effective date of the bill (January 1, 2018) is based on the laws in effect on that person’s termination date**

Please note that this is proposed legislation. It must be passed by the Missouri House and Senate and approved by the Governor. If it is passed, it could also be change during the process. We will monitor all legislation impacting MOSERS and inform our members of any changes that become law. The 2017 legislative session ends on May 12, 2017.

*Language to reduce the MSEP 2011 vesting requirement is also contained in HCS SS SB 62, HCS SB 394, and SCS HCS HB 831.
**Termination date is your last day of work in a MOSERS (or MPERS) benefit-eligible position, as reported by your employer.

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