College & University MOSERS Members

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I work at a university. The president of the University recently said that MOSER's is trying to kick university employees out of the system. What will happen to our pensions if we are kicked out?
We are not pursuing any efforts to remove university members from MOSERS. Ultimately, if there were any proposed changes to any retirement plan provisions for our members, they would have to go through the legislative process, be passed by the Missouri General Assembly, and be signed into law by the Governor. The 2019 legislative session begins January 9, 2019 and ends on May 17, 2019. You can track all proposed legislation relating to MOSERS on our Legislation page or on the Joint Committee on Public Employee Retirement website. Print Friendly and PDF

BackDROP & Returning to Work

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What would happen if I retire and draw backdrop and later decide to return to work for the State in a benefit eligible position? I know my retirement benefit would stop but what would happen with the backdrop?
If you retire and return to work in a benefit-eligible* position, your monthly retirement payment will stop as soon as we are notified that you are re-employed. However, any BackDROP money you received is yours to keep – there is nothing that requires you to return any of it to MOSERS if you return to work. Once you have worked for at least 12 continuous months in your new benefit-eligible position, you will begin accruing a separate retirement benefit. Once you re-retire, your previous benefit will restart and your new benefit (based on your new service and salary) will be calculated and your benefit payments (old benefit plus new benefit) will resume. You are not allowed to elect BackDROP after you have first retired. In other words, you will not be eligible for BackDROP if you return to state employment after having already retired from the state.

If you retire and return to work in any position not covered by MOSERS or MPERS (including work for the state in a non-benefit-eligible position), you may continue receiving your MOSERS pension benefits and earn as much as you wish. Such employment will have no effect on your MOSERS benefit.

*A benefit-eligible position is one that normally require at least 1,040 hours of work per year, is permanent in nature, and is covered by MOSERS or the MoDOT and Patrol Employees’ Retirement System (MPERS). Your employer, not MOSERS, determines if you are working in a benefit-eligible position.

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MSEP 2011 Vesting

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I was hired on June 30th 2014 and I was told I was vested at 10 years of service. Due to this change am I now vested at 5 years instead of 10?
Yes, if you continue working until you have five years of service, you will be vested. At the time you were hired in 2014, vesting for members of the MSEP 2011 (those first employed in a MOSERS benefit-eligible position on or after January 1, 2011) was ten years. Last year, the Governor signed legislation which changed the vesting requirement to five years, effective January 1, 2018. MSEP 2011 members must be actively employed on or after 1/1/2018 to be covered by this change. The changes were summarized on our legislative page and in this article about the vesting change on our website. Keep in mind, the longer you work, the more credited service you will have and the higher your pension benefit will be.
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BackDROP & Survivor Benefit?

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If I have completed my five year backdrop period and continue working in my state position, would my spouse receive the backdrop lump sum payment if I died while still working?
For example, if I completed the five year backdrop period on 8-1-2018, continued working, planned on retiring on 6-1-2019, but died on 3-1-2019 - would my spouse receive the lump sum back drop as well as the monthly survivor pension benefit, or would she just receive the monthly survivor pension benefit?
If you pass away before your retirement date, any elections you made about retirement are null and void, including any elections about BackDROP. If  you were still working and had not yet reached your retirement date, you are considered an “active member” and we must pay your eligible survivor. Your spouse’s monthly survivor benefit would be based on the Joint & 100% benefit payment option and calculated using your final average pay and credited service as of your date of death. Your spouse would not receive the BackDROP lump-sum payment if you died prior to your retirement date. In calculating your spouse’s monthly benefit, we would count the time in what would have been your BackDROP period – your total years and months of creditable service. For more information regarding survivor benefits, please visit the Survivor section of our website. 
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Increasing Contributions?

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Is it possible to contribute more to your pension, to lower your retirement date and still receive a full pension.
No. The only potential way to move your retirement eligibility date closer is to purchase or transfer qualifying prior public service that you may have and combine it with your MOSERS pension. See our MSEP 2011 Acquiring Service Credit brochure for more information or contact a MOSERS benefit counselor to see if you qualify and if it would be beneficial for you to do so.

In order for any prior public service to qualify, it must have been full-time, nonfederal, public (government) employment that you performed in Missouri. Examples include prior employment with a public school, city, or county in Missouri, or employment covered by the MoDOT & Patrol Employees Retirement System (MPERS). This could potentially make you eligible for retirement sooner if the extra service resulted in you hitting the Rule of 90 prior to age 67. (The Rule of 90 is available only to those still actively employed by the state.)

You may also want to keep in mind that you are not required to keep working for the state until retirement age in order to get your pension. Once you are vested with MOSERS, even if you leave state employment, you will be eligible for a lifetime monthly benefit once you also meet the age and all other legal requirements and retire under a MOSERS defined benefit pension plan. Your benefit is calculated using the formula:
Final Average Pay x Credited Service x Multiplier = Monthly Base Benefit. 
Remember, it is this formula, NOT employee contributions (made by those first employed on or after 1/1/2011), that determines your monthly retirement benefit. The longer you work, the more your benefit will be.

You certainly can contribute more to MO Deferred Comp to increase your supplemental savings for retirement but it won’t make you eligible for retirement any sooner.

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Prop A

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How will the rejection of Prop A impact retirees? Will they have to pay union dues? Will a portion of dues go to political candidates? Thank you.
 Prop A has no impact on any MOSERS retiree benefits. Print Friendly and PDF

COLAs

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I don't understand if mosers is profiting so well why do the retirees only get 1.5% raise. It seems like the pot gets bigger and why not pass it out. The cost of living goes up an up but the retirees are going backwards. I have been retired 14 years and only get 21% increase and Mosers does about 7.5% thats 147% increase. It looks a little lopsided. I know it's a complicated process. Like the ones that took the back drop you handed them a bonus that i never saw because I choose to retire and give a job to younger adults instead of letting them not work and the back droppers working filling that spot. 
The way that MOSERS is set up, neither staff nor Board Members can decide to increase cost-of-living adjustments (COLAs) or monthly retirement benefits. It is all based on state statute and it all factors into the overall funding structure of the retirement system.

COLAs are calculated according to state statute (104.010.14 of the Revised Statutes of Missouri), which stipulates that the CPI used to calculate COLAs must be the “CPI-U (Consumer Price Index for All Urban Consumers). For most general state employees, the COLA is based on 80% of the percentage increase in the average CPI from one year to the next. COLAs are intended to help you cope with the rising cost of goods and services that you buy.  You can see a detailed explanation of how the 2018 COLA was calculated in January 2018.

Your benefit is calculated using the formula: Final Average Pay x Credited Service x Multiplier = Monthly Base Benefit. Benefit amounts vary for each retiree based on their individual pay and service history. Funding to pay benefits comes from three sources:

1. Contributions from Employers, as a percentage of employee payroll
2. Contributions from Employees first employed in a benefit-eligible position on or after January 1, 2011
3. Investment Returns

The purpose of investing trust fund assets is to provide a funding source that helps pay the cost of the benefits. Over that past 20 years, 61% of the assets in the MOSERS Trust Fund have come from investment returns. If it weren’t for the income from investments, the cost to the state and to members would be significantly higher. When calculating how much the state will have to contribute going forward, our external actuaries make assumptions on various economic and demographic factors. One is how much we can expect to earn from investment income. That assumption for FY18, which ended June 30, 2018, was 7.5%.

BackDROP isn’t a bonus. It is an benefit payment option available at retirement if an employee works at least two years beyond their normal retirement eligibility date. It allows such members to get a lump-sum payment in addition to their monthly benefit. However, none of their pay or service credit during their BackDROP period counts toward their monthly benefit. So, generally speaking, their monthly benefit is less if they elect BackDROP than it would have been had they not taken BackDROP.

Thank you for your question and for your service to the State of Missouri. Print Friendly and PDF

Withdrawing Funds

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Is is possible to withdraw a portion of our annuity?
No. MOSERS is a non-contributory defined benefit (DB) plan for members hired before January 1, 2011. As such a member, your employer pays the necessary contributions to MOSERS while you are actively employed so that you may receive a future monthly retirement benefit and potential survivor benefits. Since you do not pay contributions, you are not eligible to withdraw funds from the retirement system.

Members employed in a MOSERS-covered position for the first time on or after January 1, 2011 are required to contribute 4% of their gross salary to help fund the retirement system. Those members, if they leave state employment, have the option of requesting a refund of the contributions they have made to MOSERS plus any interest on their contributions – if they do so prior to reaching normal retirement eligibility. Any member who receives a refund will forfeit service credit and the right to receive any future retirement benefits from MOSERS.

Any refund of contributions taken as cash (as opposed to rolling it over to MO Deferred Comp, a traditional IRA, or other qualified retirement plan) is considered taxable income for the year you receive it. MOSERS is required to withhold 20% for federal taxes on such a refund. If you receive a cash payment before you reach age 59½ and do not roll it over, you may have to pay an IRS a penalty equal to 10% of the taxable portion of the payment in addition to the regular income tax. See our Special Tax Notice for more information.

The IRS does not currently allow pension plans to offer lump-sum payouts to current retirees in exchange for reduced future benefit payments. MOSERS did offer a buyout program which enabled eligible members to accept a lump-sum payment in lieu of all future annuity payments. However, this program was not available to members who had already begun receiving monthly benefits.

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High 36

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MY FIVE YEAR BACKDROP PERIOD IS COMPLETE. I KNOW MY RETIREMENT CHECK IS BASED ON MY BEST 36 MONTHS. IF I DO NOT ELECT BACKDROP, CAN I USE MY BEST 36 MONTHS THROUGHOUT MY ENTIRE CAREER, OR ONLY THE PERIOD PRIOR TO MY ORIGINAL BACKDROP DATE?
Yes, if at retirement you do not elect BackDROP, we will review your entire pay history and find the 36-month period with your highest pay, which may be in your final years of employment, and will use that in calculating your monthly benefit.

Background for Other Readers: Any pay or service you get during your BackDROP period is not counted when calculating your monthly benefit payment.  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.

But keep in mind, you are not required to take BackDROP, regardless of how long you work beyond normal retirement eligibility, and you don’t have to notify MOSERS of any decisions about BackDROP until you retire. You may elect not to take BackDROP if you want all your service and pay to count and, likely, increase your monthly benefit.

This graphic may help explain the big picture, or you can read the BackDROP brochure on our website for more information. BackDROP can be complicated to understand, so MOSERS benefit counselors are available to help by phone or in person by appointment. Call (800) 827-1063 to discuss your options. Counselor can also provide you with benefit estimates, with and without the BackDROP included, so you can compare.

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Rule of 80 & Age 55

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One of my coworkers informed me that state employees who are retirement eligible per the rule of 80 will be penalized if they are under the age of 55. I am not aware of any such penalty but wanted to ask. 
No. There is no penalty or reduction to your MOSERS pension benefit if you meet both the age and service requirements for normal retirement eligibility before the age of 55. To be eligible to retire under the Rule of 80 in the MSEP and MSEP 2000, you must be at least age 48 and your age and years of service must equal 80 or more.

Taxes &/or penalties related to other distributions:

•        There may be a 10% IRS tax penalty if you are younger than age 59 ½ at the time of payment, elect BackDROP*, and take a lump-sum cash payment. If you terminate employment in or after the year you reach age 55, this penalty will not apply. Additionally, MOSERS is required to withhold 20% of a BackDROP cash payment for federal taxes. More details are available in the Special Tax Notice brochure on our website. In such a situation, you can avoid the IRS tax penalty by rolling over the BackDROP payment to a qualified retirement account such as with MO Deferred Comp and not withdrawing it until you meet all IRS regulations (generally speaking, that is after you attain age 59 1/2 but there are exceptions, see page 4 of the Special Tax Notice, including one for public safety employees).
•        If you have made pre-tax contributions to the MO Deferred Comp plan (an internal revenue code section 457(b) plan), distributions from that plan following retirement or termination of service at any age are subject to ordinary income tax only.
•        Employer “match” contributions made on behalf of an employee to a 401(a) plan are subject to an additional 10% penalty if withdrawn prior to age 59 1/2.

Be sure to check with your financial institution or a tax advisor for information about your tax liability when you begin withdrawing your funds.


*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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Break in Service

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If I want to take a break from working right after retirement and not do the backdrop at that moment, how long can that break be before I decide to go back to work in a MOSERS-covered position? Or can that be done? And will that be considered backdrop then?
Per MOSERS board rule, a break in service is being off payroll for an entire calendar month. It looks like you have three options.

1. If you retire and return to work in a benefit-eligible* position, your monthly retirement payment will stop as soon as we are notified that you are re-employed. Once you have worked for at least 12 continuous months in your new benefit-eligible position, you will begin accruing additional retirement benefits. Once you re-retire, your benefits will be recalculated and your benefit payments will resume. You are not allowed to elect BackDROP after you have first retired. In other words, you will not be eligible for BackDROP if you return to state employment after having already retired from the state.
2. If you retire and return to work in any position not covered by MOSERS or MPERS (including work for the state in a non-benefit-eligible position), you may continue receiving your MOSERS pension benefits and earn as much as you wish. Such employment will have no effect on your MOSERS benefit.
3. If you leave state employment but don’t retire and then, after a break in service, return to state employment in a benefit-eligible position, you may become eligible for and elect BackDROP.

Visit our website for a list of state agencies who employ workers in MOSERS-benefit-eligible positions. Be sure to discuss your situation with the human resources staff at the agency where you are considering employment. They will be able to tell you whether or not the position is eligible for benefits.

You may contact a MOSERS benefit counselor to get more information about your individual situation and options.

*A benefit-eligible position is one that normally require at least 1,040 hours of work per year, is permanent in nature, and is covered by MOSERS or the MoDOT and Patrol Employees’ Retirement System (MPERS). Your employer, not MOSERS, determines if you are working in a benefit-eligible position.

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Final Average Pay & BackDROP

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Note: the question below refers to a previous Rumor Central question from July 2018:
"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."
Okay, based off this information, since I am working on my back-drop currently, an increase in pay will NOT increase my retirement? I am planning on working overtime as a Correctional Officer, will this have an effect on the amount of money I receive in my retirement? Yes or No...
You are correct that pay earned during your BackDROP period will not count towards calculating your retirement benefit. Your monthly benefit will be calculated using your final average pay (FAP) and credited service as of your BackDROP date (the day your BackDROP period begins).

Any pay or service you get during your BackDROP period is not counted when calculating your monthly benefit payment. To be clear, any overtime pay you receive during your BackDROP period will not be considered in calculating your final average pay. But keep in mind, you are not required to take BackDROP, regardless of how long you work beyond normal retirement eligibility, and you don’t have to notify MOSERS of any decisions about BackDROP until you retire. You may elect not to take BackDROP if you want all your service and pay to count and, likely, increase your monthly benefit.

This BackDROP graphic may help explain the big picture or you can read the BackDROP brochure on our website for more information. Details related to BackDROP can be confusing! Members who are or may become eligible for BackDROP are encouraged to attend a PreRetirement Planning Seminar and/or make an appointment with a MOSERS benefit counselor for further explanation.

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