Funded Status

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I have heard reports on the news saying that our retirement benefits are only 60% funded and that MOSERS is in trouble. What is going on with that? 
Just to clarify, MOSERS pays 100% of the benefits due to members. The “funded” status that you are hearing about in the news has to do with the assets we have on hand relative to all current and future liabilities. As of June 30, 2017, MOSERS is 67.5% funded (p. 129 FY17 Annual Report).

Your MOSERS Board of Trustees is actively engaged in prudent analysis, plan sustainability, and benefit security for members. The Board's recent decisions to reduce the assumed rate of return on investments will result in higher employer contributions and a lower funded status in the short term but will strengthen MOSERS’ financial position in the long term. Each year, the MOSERS Board certifies an employer contribution rate which results in a state budget appropriations request. The employer contribution is based on a variety of factors and is calculated by our external actuary as the amount needed in order for MOSERS to pay current and future benefits.

Money to pay your retirement benefits comes from three sources:

1. Employer Contributions: The Missouri General Assembly has consistently appropriated the full employer contribution to MOSERS as recommended by our external actuary. Governor Parson signed the FY19 budget bills passed by the General Assembly, including the MOSERS appropriation contained in HB 2005, which fully funds the Board certified employer contribution rate. Pension systems that are in trouble are generally those that have a consistent pattern of not receiving the full amount of employer contributions.

2. Employee Contributions: Members first employed in a MOSERS or MPERS benefit-eligible position on or after 1/1/2011 contribute 4% of pay to their retirement system.

3. Investment Returns: Over that past 20 years, 61% of the assets in the MOSERS Trust Fund have come from investment returns. MOSERS earned approximately 7.5% for Fiscal Year ending June 30, 2018, which added approximately $600 million to the MOSERS trust fund.

Please see Key Facts Regarding Funding for more information. We will send a summary annual financial report for Fiscal Year 2018 to all members in December as part of the fall/winter newsletter.

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State Contribution to Retirement?

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Does the State of Missouri contribute any matching funds to the retirement program?
I am receiving conflicting information, that there are and are not matching funds. I've been told 0 and "up to 3%."
As a MOSERS benefit-eligible member, you have a defined benefit pension plan, which provides lifetime monthly benefit payments to you after you retire. It is based on the formula: 

Final Average Pay x Credited Service x a Multiplier = Your Monthly Base Benefit.

Remember, it is this formula, NOT contributions, that determines your monthly retirement benefit. 
There are three sources of income that fund your MOSERS defined benefit pension plan: 

1. Contributions from members of the MSEP 2011 and the Judicial Plan 2011, which are 4% of pay,
2. Your employer’s contributions, which are currently, 20.21% of covered payroll, and 
3. MOSERS’ investment income. 

You can read more about plan funding on our website. If you leave state employment prior to normal retirement eligibility, you may request a refund of your member contributions plus interest. (Your member contributions consist of #1 above; #2 and #3 remain in the MOSERS trust fund.) Interest on member contributions is calculated using the 52-week treasury bill rate. 

You may also participate in the State of Missouri Deferred Compensation Plan (MO Deferred Comp), which is a supplemental retirement savings program. Currently, the State does not match any contributions to MO Deferred Comp, but there are many other reasons that MO Deferred Comp is an important part of your benefit package. 

Watch our New Employee Orientation video for a quick overview of your MOSERS benefits. 

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COLA for 2019?

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When we will I know when I am getting an annual COLA for 2019? I thought it was mid-July when MOSERS announced it.
 MOSERS will be able to determine the 2019 COLA in January 2019. The rate calculation is based on 80% of the percentage increase in the average Consumer Price Index from one year to the next with a maximum increase of 5% (minimum 0%). The information necessary to make that calculation will be available in January 2019 and based on a comparison of changes from 2017 to 2018.

In January 2018, we determined that the COLA for 2018 is 1.704%. Each year, you will receive a COLA on the anniversary of your retirement date, unless one of these exceptions applies to you:

·         Retirees who converted from MSEP to MSEP 2000 during the conversion window in 2000 have COLAs payable each year in July.
·         Retirees who elected a BackDROP* will have COLAs payable each year on the anniversary of their BackDROP date rather than on the anniversary of their retirement date.
·         MSEP 2011 members hired after January 1, 2018 who leave state employment prior to retirement eligibility, will receive their first COLA in retirement on the second anniversary of their retirement.

We will send you a notice, either in the mail or in your MOSERS Document Express online mailbox, when the COLA is applied to your monthly benefit payment.

*BackDROP is available only to general state employees who are members of MSEP & MSEP 2000 and who work at least two years beyond normal retirement eligibility. 
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BackDROP Payment

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If you opt to have the cash pay-out of your backdrop, how long does it take after your retirement date to receive it?
Your BackDROP* payment (either cash or rollover) will be paid on the last working day of the month your retirement is effective, along with your first monthly retirement benefit payment. For example, if your retirement date is May 1, your BackDROP payments will be made on the last working day of May. This is assuming you have completed all necessary forms, including your BackDROP Distribution form, when you retire online or on paper.

Please be sure to read the Special Tax Notice brochure on our website to learn about various tax consequences if you take some or all of your BackDROP payment in cash.

*BackDROP is an option that allows eligible members to receive a lump-sum payment in addition to an ongoing monthly payment. It is available only to general state employees who are members of MSEP & MSEP 2000 and who work at least two years beyond normal retirement eligibility.   Print Friendly and PDF

MOSERS Board of Trustees

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Do Board Members receive any compensation for there time?
No, they do not receive compensation for serving on the board, but are reimbursed “for necessary expenses incurred in the performance of their duties for the system” per chapter 104.470 (3) of the Revised Statutes of Missouri.

As a reminder, there is an election this year for 2 new MOSERS board members to represent active members and one member to represent retired members. These members will serve 4-year terms beginning in January 2019. We have posted the candidate statements on our website and Election America will send ballots to eligible members in August to notify them about voting by mail, phone or online. 
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Overtime & Final Average Pay (FAP)

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Given the extreme amount of overtime currently being worked by corrections officers (over 1 million hours so far in 2018, and 1.6 million last year), how will this effect the long term funding available for pensions? Their pension is based off their 3 highest consecutive grossing years of service. Many officers have been grossing 2-3 times their base pay due to the inordinate amount of overtime. This has been ongoing now for two-three years. This will make a huge impact on their pension monthly benefit, increasing it exponentially. Has there been any comprehensive study done on how this will effect our pension funding in the future?
Calculating Your Benefit

You are correct, retirement benefits for general state employees are calculated using a three-part formula:

Final Average Pay (FAP)  x  credited service  x  a multiplier =  Monthly Base Benefit

As you referenced, FAP is determined using your highest 36 full consecutive months of pay when looking at your entire work history covered under MOSERS. Practically speaking, for most, that is their last three years, but not always. The exception to this would occur under the BackDROP (if eligible). If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your MOSERS-covered work history prior to your BackDROP date. In other words, any pay or service during your BackDROP period doesn’t count toward your monthly benefit payments.

Overtime pay can increase your retirement benefits if there is a pattern of overtime pay. We don’t count one-time payments or any payments from your employer after you terminate state employment such as for unused vacation/annual leave.

Pension Funding

With regard to your question about how all this overtime will affect pension funding, you can rest assured that it is all being factored in to our funding process, we have made our external actuary aware of it, and we will continue to monitor it.

In setting funding policy, our Board of Trustees works with our external actuary to review and set assumptions about a variety of economic and demographic factors including payroll growth, inflation, life expectancy, and several other factors.

We conduct an annual “valuation” which is collecting all the above data (and more) and sending it to our external actuary. Our actuary does an “experience study” every 5 years to compare our assumptions to our actual experience with our members and with other economic factors. Then, we make adjustments accordingly. All that (and more) goes into the calculation of employer contribution rates going forward.

The Department of Corrections (DOC) is a large employer but is one of several that we cover. While there may have been increases in payroll at DOC, they are offset elsewhere. For the year ended 6/30/17, the overall pay increase for state employees we cover was slightly less than assumed (p. 20 of FY17 Valuation). We will have the data for FY18 soon. Each of the 39 state departments, agencies, colleges, or universities that we cover makes employer contributions as a percentage of their total actual payroll, which includes overtime pay. So, paying overtime also increases the amount of employer contributions that DOC has already been making to MOSERS. As mentioned above, we will continue to monitor overtime at DOC and factor it into our funding calculations.

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Going Back to Work to Become Vested

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I had 4 years and 7 months in the MOSERS retirement system before changing employment and as I'm now approaching retirement age, would like to go back and pick up one more year of MOSERS eligibility to become vested.

Can you provide me with a list of Employers near Springfield Missouri that have MOSERS retirement?

How would I go about estimating what my potential benefit would be after working 12 consecutive months to become vested to see if it's even worth it.

You are correct in your understanding of the requirement to become vested. Since you left state employment with less than 5 years of service, you forfeited your accrued service credit and all rights to benefits from the MOSERS. If you return to work in a MOSERS-covered position, your forfeited service will be restored and combined with your new service after you have completed 12 continuous months of employment. You can find a list on our website of state agencies who employee workers in MOSERS-benefit eligible positions.

The amount of your potential MOSERS benefit will be determined by this formula: Final Average Pay x Credited Service x Multiplier = Monthly Base Benefit
Let’s assume:
•    Your final average pay is $3,250 per month (an approximate average of state employees)
•    You end up with 6 years of credited service
•    You are in the MSEP 2000 and the multiplier is 1.7%

The formula would be $3,250 x 6 x 0.17 = $331.50 per month. This would be a lifetime monthly benefit for you.

Keep in mind that your benefit will be based on your actual data and could be higher or lower.  Working longer would increase your benefit. You can request an individualized benefit estimate from a MOSERS benefit counselor, and in most circumstances by logging in to your MOSERS Member Homepage through our website.

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Medical Premiums & MOSERS Retirement Benefit Check

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My husband and I both retired in our late 50's and still have 5 years to go before we reach medicare age. Hopefully this won't happen, but if insurance keeps going up what would happen if the amount of our insurance exceeds the amount of my benefit check? Both of our premiums are taken out of my check. I'm worried about the increasing cost. As we don't want to lose the insurance would we be able to pay the amount not covered by my benefit check directly to MOSERS?
Note: MOSERS administers retirement, life insurance and long-term disability insurance benefits. For most state employees, health care is administered by Missouri Consolidated Health Care Plan (MCHCP). They provided us with a response for this question below. 

MCHCP will not deduct partial premiums from a retirement benefit check.  If the MCHCP premium is more than the retiree’s benefit check amount, then MCHCP will automatically set up the member on direct bill payment. MCHCP will mail a billing statement to the retiree/member showing the premiums due and the date payment is due. Members on direct bill have other payment opportunities including automatic (ACH) withdrawal from a bank account or online bill pay. The automatic withdrawal authorization form is available can be found on the MCHCP website:

Also, members on direct bill may choose to pay premiums online through their myMCHCP account using a debit or credit card. Please note the bank which administers the online payment process for MCHCP charges a service fee when a member uses this payment option.

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Pay Raises

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are we possibly getting a raise in January
If you are asking about a pay raise for active state employees (versus a cost-of-living adjustment for MOSERS retirees), please understand that MOSERS is not involved in any decision making related to state employee pay. As a courtesy, we can pass along the following information:

Information about the Governor's Fiscal Year 2019 budget is on the Governor’s website. It includes appropriation authority for a pay raise for state employees. The amount of the pay raise depends on how much the employee makes. However, we caution all employees to talk with your supervisor or human resources staff to find out if, how, and when this may apply in your individual situation.

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