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Rumor Central is Under Construction 

Updated Blog Coming Soon

Thank you for your interest in Rumor Central! As you may know, we have a new MOSERS website. Along with the new website, we will be updating and redesigning Rumor Central. Please stay tuned and watch this blog for updates. Thank you.

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Senate Bill 185

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I saw a brief note on local news that Gov. Parsons had signed a bill related to feral hogs and pension plans. Assuming this was some type of omnibus bill, can you provide information about any impacts on state pensions?
On June 6th, Governor Parson signed a variety of bills that cover many different subject areas. (View the news release on bills the Governor signed.)

The bill he signed affecting MOSERS is SB 185. We have information on our website summarizing it. This act provides continued eligibility for membership in MOSERS for employees of the Missouri Housing Development Commission and of the Environmental Improvement & Energy Resources Authority. There are no other changes to retirement provisions affecting any other members or retirees.

The bill about feral hogs is separate legislation; it is HB 655.

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Married State Employees & Survivor Benefits

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If I pass away and I am vested with the state for 14 yrs, can my spouse get my state retirement; in addition, can she draw off her state retirement while drawing off my state retirement? In other words, can she draw off both retirements?
Yes – Let’s look at different scenarios.

Death Before Retirement:

As a married, vested member, if you die before you retire and while still employed, your eligible spouse will receive your MOSERS survivor benefits. When she retires, she can draw her own MOSERS pension and the two will have no impact on each other. See a recent posting, Death of Member Before Retirement, for more information. (The rules are not the same for Social Security benefits. Consult the SSA for more information on their rules about spouse benefits.)

Death After Retirement:

When each of you retire, you will choose a benefit payment option. Options include: Life Income Annuity, Joint & Survivor options, and Guaranteed Payment options.

If you elect the Life Income Annuity option, your retirement benefit will not be reduced for the purpose of providing a survivor benefit. Your final payment will be sent to your designated beneficiary. Then, there will be no ongoing monthly survivor benefits payable to anyone after your death.

Since you are married, you may elect the Joint & 50% Survivor or the Joint & 100% Survivor option. Each provides a lifetime benefit to you. If you die first, your spouse will receive a lifetime benefit for the remainder of her life. Your benefit will be reduced to provide this benefit*. Your spouse can receive your survivor benefit even if she is receiving her own MOSERS pension.

If you elect a Guaranteed Payment option, you may name anyone as your beneficiary (does not have to be your spouse but she would have to waive her spouse benefit). Your retirement benefit will be reduced and if you die before all of the guaranteed payments have been made, the remaining payments will go to the beneficiary you designated at retirement.

For more information, please review the Death of a Member section of our website. You can read more about benefit payment options in the Retirement Guide on our website in the Ready to Retire section. If you would like more information specific to your situation, please contact a MOSERS benefit counselor. They can answer questions over the phone, or you can set up an in-person appointment.

*There is no reduction for members who retire under the MSEP and elect the Joint and 50% survivor option. 

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Pay Raise & Final Average Pay

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will the raise that we are suppose to get in 2020 effect my retirement?
if I am already on my backdrop and if I retire in dec of 2021.
Assuming the pay raise is included in the final state budget and goes into effect in January 2020, if you continue working and do not take BackDROP, the impact of a pay increase on your monthly retirement benefit payment would be dependent upon how long you continue working. 

Remember, in calculating your monthly benefit, one factor is your Final Average Pay, which is your highest 36 consecutive months of pay. So, if you got a raise and worked a few months past January 2020, the impact may be very small. If you got a raise and worked an additional 36 months, the impact would be bigger.

Any pay earned during your BackDROP period has no impact on either your monthly benefit amount or your BackDROP lump-sum amount. If you are eligible for and elect the BackDROP upon retirement, your FAP will be calculated using your MOSERS-covered work history prior to your BackDROP date. In other words, pay (and service) during the BackDROP period is excluded when calculating your monthly benefit amount.

But, after you retire, keep mind that MOSERS retirees receive an annual cost-of-living adjustment (COLA) between 0-5%. This amount is calculated each January and is based on the CPI (Consumer Price Index), which is unrelated to any pay raises state employees receive. You can find more information about the retiree COLAs on our website.

You can run benefit estimates under a variety of scenarios by logging in to MOSERS website, or ask a MOSERS benefit counselor to run them for you. You may find our Creating a Benefit Estimate video and our Comparison Calculator helpful in weighing your options.

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Death of Member Before Retirement

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My age is 58 and i have worked for the state 20 years. My question is if i died before i retired well my spouse receive my pension? My normal retirement is 1/1/2020.
Yes, if you are an active general state employee, married, vested in MOSERS, and die before you retire with MOSERS, your eligible surviving spouse will receive survivor benefits. If you have no surviving spouse, we will pay survivor benefits to your natural or legally adopted child(ren) younger than age 21. If you die without any eligible beneficiaries, no survivor benefits will be paid. These benefits would be payable in the month following your death.

The monthly benefit for your spouse will be based on the benefit you have accrued as of your date of death. We will calculate it according to the Joint & 100% Survivor Option. We will pay monthly survivor benefits for the remainder of your spouse's lifetime. You can find information regarding the death of a member on our website. Survivors should contact a MOSERS benefit counselor for guidance through the process.

An exception to this: The “immediate” survivor benefit provision is not available for terminated-vested members of MSEP 2011  employed on or after January 1, 2018. This change was in SB62 during the 2017 legislative session. It is a cost offset for the reduction in the vesting requirement from 10 years to 5 years for members of MSEP 2011. Eligible survivors of such members will begin receiving benefits when the deceased member would have attained normal retirement age.

Members often have similar questions about death AFTER retirement. A key feature of your MOSERS defined benefit (DB) pension plan is that it can provide financial security for your eligible survivor(s) as well. During the retirement process, you will make elections to determine if any potential survivor benefits will be paid to anyone after your death or not – to a spouse if you are married, or, potentially, to another beneficiary.

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Public Plan?

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Is MOSERS a public or private pension plan?
MOSERS is a public defined benefit (DB) pension plan so the benefit you receive through MOSERS is considered a public pension. As long as you reside in Missouri, your retirement benefits are subject to Missouri state income tax and federal tax. You may also be interested in information we have posted about the Missouri state tax Public Pension Exemption. Print Friendly and PDF

State Employee Pay Raises & Retiree COLAs

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(Note - We have edited the question slightly to clarify it.) If all state employees get a raise, for example, a 3% raise from the legislature, will retired state employees also get a raise?
The two are not connected. A change in active state employee pay has no impact on benefit amounts for retired general state employees (or retired judges).

However, by law, regardless of whether active state employees get a raise or not, MOSERS retirees receive an annual cost-of-living adjustment (COLA) of 0 - 5%. The amount is based on the increase in the Consumer Price Index (CPI). Retired general state employees (and judges) receive a COLA each year on the anniversary of their retirement date, unless one of the following exceptions apply:

•       Retirees who converted from MSEP to MSEP 2000 during the conversion window in 2000 receive COLAs each year in July.
•       Retirees who elected a BackDROP receive COLAs each year on the anniversary of their BackDROP date.
•       MSEP 2011 members first employed after January 1, 2018 who leave state employment prior to retirement eligibility will receive their first COLA 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, during the month when you get your COLA. You can find more information about retiree COLAs on our website.

Additional Note: Legislators and statewide elected officials who took office on or after July 1, 2000 (members of MSEP 2000 or MSEP 2011) may have their benefit adjusted according to the percentage increase in pay for an active legislator or statewide elected official but receive no other COLAs. 

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Contribution Refunds

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I’m considering accepting a job that participates in Moser. There is a substantial payroll contribution for the pension and that it takes five years to be vested. My question is if I do not work the full five years in order to be vested will my payroll contributions be available to me for withdrawal or transfer?
Anyone who is first employed in a MOSERS or MPERS benefit-eligible position on or after January 1, 2011 must contribute 4% of pay to the retirement system. Your 4% contribution is used to help pay the cost of your future defined benefit retirement plan and could potentially pay you back far more than you contribute. See a simplified example in The Value of Your Retirement Benefit. When you retire, you will receive a benefit payment every month for as long as you live. This means you can never outlive your MOSERS retirement benefit.

If you leave state employment prior to becoming eligible for normal retirement, you may request a refund of your contributions plus credited interest. By taking a refund, your forfeit all your credited service. Or, you may leave your contributions with the system if you think you might return to work for the state at some point in the future and would like for those years of service to count toward an eventual retirement benefit. See our Member Contributions brochure for more information. 

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MOSERS' Funding Ratio

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So I read on here that the Funding Ratio for Mosers was around 82% in June of 2010. Looking at the most recent Fund Ratio:59% (correct me if I’m wrong). Should I be concerned about this considering the 20-22% drop in just 8 years when I plan on retiring in 28 years? What is the reason for this significant drop?
If the drops related to poor investments why when the overall market has recovered and has been doing well during this period?
If because of liabilities continue to grow faster than contributions/investment returns what steps are being taken for this? Is the lump sum option presented to former employees that left the state going to help this?
-If it continues to go down wont employee/employer contributions continue to go up? The employer contribution rate has steadily been rising correct? Isn’t this a bad sign for sustainability of the fund?
What steps are being taken to prevent the pension fund from ending up like California or Arizona in the next decade or so? Is any research being done in relations to these funds on why they are failing and how to prevent similar outcomes for Missouri? I’m just asking as I have been very concerned for my future retirement as I’m sure many others are.
Thank you for your insightful questions and your interest in these very important topics. 

Certainly, one factor that spurred the decrease in MOSERS’ funded status was the Great Recession of 2009. In our fiscal year 2010 annual report (FY10 CAFR), it says, “During the year ended June 30, 2010, the funded ratio (of …the MSEP…) decreased from 83% to 80.4%, primarily as the result of the previous years’ unfavorable investment experience” (p 12 FY10 CAFR).

Consequently, Missouri was among the first of many states to pass legislation making changes to their retirement benefits. In 2010, the Missouri General Assembly created the MSEP 2011. By requiring employee contributions and increasing the retirement eligibility age (among other changes), this action assists in long-term plan sustainability, retained the defined benefit retirement plan structure for state employees, and provides stability for future generations. While the impact of these changes will grow over time, as of January 30, 2019, already 45.72% of active state employees are in the MSEP 2011.

However, the primary reason that MOSERS’ funded ratio has dropped so significantly is that our Board of Trustees has taken action over the past four years to incrementally reduce our assumed rate of return (ARR) on investments. This reduction is to more accurately reflect capital market expectations. The Board has also indicated their intention to further reduce the ARR going forward:

MOSERS Assumed Rate of Return
•         Effective 6/30/2011: 8.5%
•         Effective 6/30/2012 - 6/30/2015: 8.0%
•         Effective 6/30/2016: 7.65%
•         Effective 6/30/2017: 7.5%
•         Effective 6/30/2018: 7.25%
•         The MOSERS Board has indicated an intention to reduce the ARR to 7.10% for the June 30, 2019 actuarial valuation.
•         The MOSERS Board has indicated an intention to reduce the ARR to 6.95% for the June 30, 2020 actuarial valuation.

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 automatically result in higher employer contributions and a lower funded status in the short term but work to ensure MOSERS’ sustainability over the long term. Each year, the MOSERS Board certifies an employer contribution rate which results in an appropriation request within the state budget. The employer contribution is calculated by our external actuary as the amount needed from the state, as the employer, (in addition to investment income and employee contributions) to systematically and appropriately pay current and future benefits. In other words, if we assume that, in the future, we will receive less income from investments and not change employee contributions, the difference must come from increased employer contributions.

As you inquired about, the voluntary Buyout Program, authorized by state law, was offered by the MOSERS Board of Trustees in 2017 and 2018 to eligible vested former state employees of the system in an effort to reduce MOSERS pension liability. It eliminated $41 million in net liability for the system.

Additionally, our investments staff reduced investment fees by $36 million in FY18 and the MOSERS Board adopted a new asset allocation, which began in January 2019 and will be fully implemented over a 36-month period. While MOSERS’ investment returns have not always met assumptions in recent years, our long-term investment results, of 9.4% (since first tracking this data in 1981), exceed our current assumed rate of return. This, combined with the new investment portfolio, put us in a good position to meet our assumptions in the future.

It is important to remember that a pension system, such as MOSERS, operates on a very long-term time horizon. While our actuaries expect that employer contributions will increase and our funded status will decrease over the next few years, they also expect that throughout your career, our funded status will improve and MOSERS will be well-funded by the time you retire – allowing us to keep our promise of helping to provide retirement security for you and all of our other current and future retirees.

For more information on the above, see our FY18 Summary Annual Financial Report and our Actuarial Valuation Report as of June 30, 2018 (p 32, column 6). 

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Purchasing Military Service with Deferred Comp Funds

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I was told that I could use the money from my Deferred Comp to purchase my military time. Is that correct? If so, how would I do so? I could not find any details about in on the website.
Yes, your MO Deferred Comp 457(b) – excluding Roth 457 assets –  and 401(a) funds are available to use for purchasing prior military service. If you have not already done so, complete the Application to Purchase Active-Duty Military Service, attach the required documentation and submit it to MOSERS. We will provide you with an estimate of the cost to purchase your prior military service and a Tax-Free Rollover to MOSERS form that you can use to perform that transaction.

For additional information, here is a description of this service purchase option from page 6 of our MSEP | MSEP 2000 Acquiring Service Credit brochure:

You may purchase up to four years of active-duty military service credit performed prior to last becoming a member of MOSERS. This may include active-duty military training. To be eligible to purchase military service credit, you must be:
•         A vested, actively employed member of MOSERS, or
•         A terminated-vested member of MSEP (eligible for future benefits, but no longer working for the state).

If you elect to purchase your active-duty military service, you must purchase all that you served (total months and days) up to a maximum of four years. In connection with such a purchase, MOSERS requires that you submit a copy (not the original) of your military DD 214 or NGB 23 discharge form, which verifies the following:
•         Your service was active duty.
•         Your service was in an eligible branch of the U.S. Armed Forces or reserve component (Army, Air Force, Navy, Marine Corps, Coast Guard, Army National Guard, or Air National Guard).
•         Your dates of service.
•         You were honorably discharged.

Any active-duty military service you wish to purchase must have been performed prior to last becoming a member of MOSERS. Active-duty military service performed after you last leave state employment is not eligible for purchase or automatic credit.

You may only acquire active military service that is not being used for credit or benefits under another retirement plan, other than the U.S. military.

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BackDROP Lump-Sum Payment

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I keep being told that if a person work at least 2 years backdrop pass their normal retirement, they will receive their monthly lifetime benefits, plus whatever their lump sum amount is. Is the second part of this statement true? 
Yes--If you are eligible for and elect BackDROP at retirement, you will get the one-time lump-sum payment plus monthly pension benefit payments for life.

The tradeoff is that, in most cases, your monthly benefit payment will be less than it would have been if you hadn’t elected BackDROP.

The reason most people have a lower monthly benefit when they elect the BackDROP is because any service and any salary earned during your BackDROP period (up to five years) doesn’t count when we calculate your monthly benefit amount. We use your years of service and your final average pay from BEFORE your BackDROP period.

Your BackDROP lump sum will be equal to 90% of what you would have received during your BackDROP period if you had been retired during that time (based on the life income annuity amount).

This BackDROP graphic may help you visualize how it works or you can read the BackDROP brochure for more information. BackDROP can be complicated to understand, so MOSERS benefit counselors are available to help by phone or through an in-person appointment. Call (800) 827-1063 to discuss your options. Counselors can also provide you with benefit estimates with and without the BackDROP so you can compare.

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State Employee Pay Raise

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I am planning to retire 01/07/2019. My question is... IF we were to receive the much talked about raise in January of 2020 would that action have any impact on my retirement/backdrop?
No, if you retired before a pay raise was given to active employees, any such increase would have no impact on you as a retiree. 

If you continued working beyond January 2020, got a pay raise, and did not take BackDROP, the impact of a pay increase on your monthly retirement benefit payment would be dependent upon how long you continue working. 

Remember, in calculating your monthly benefit, one factor is your Final Average Pay, which is your highest 36 consecutive months of pay. So, if you got a raise and worked a few months past 2020, the impact may be very small. If you got a raise and worked an additional 36 months, the impact would be bigger. 

Any pay earned during your BackDROP period has no impact on either your monthly benefit amount or your BackDROP lump-sum amount. 

But keep in mind that, by law, MOSERS retirees receive an annual cost-of-living adjustment (COLA) between 0-5%. You can find more information about the retiree COLAs on our website. 

You can run benefit estimates under a variety of scenarios by logging in to your MOSERS Member Homepage, or ask a MOSERS benefit counselor to run them for you. You may find our Creating a Benefit Estimate video and our Comparison Calculator helpful in weighing your options.

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Tax Information for Retirees

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If you are receiving a retirement check from the state of Missouri are you required to claim it on your state tax income tax return as income?
Yes, you are required to claim your MOSERS benefits on your state taxes if you are a Missouri resident. (If you are not a Missouri resident, contact your state department of revenue or a qualified tax advisor for the answer to this question.) Below is some additional information that MOSERS retirees often need when filing their taxes:

1.      MOSERS is a public defined benefit (DB) pension plan and the benefit you receive through MOSERS is considered a “public pension”.

2.      MOSERS withholds state taxes only for Missouri residents.

3.      As long as you reside in Missouri, your retirement benefits are subject to Missouri state income tax and federal tax. However, you may qualify for the Public Pension Exemption on your Missouri state tax return.

4.      We have mailed 1099-R tax forms to all retirees/benefit recipients, which you can read more about in the current Fall/Winter 2018 issue of RetireeNews.

5.      See “Understanding Your 1099-R” for additional information. Print Friendly and PDF

Continuing Basic Life Insurance at Retirement

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My wife also worked for the state of Missouri for 29 years. Her office closed just before she reached 80 and out. A year later she started collecting her state retirement when she turned 51. Does she still get the $5,000 life insurance like I do. I stayed for 35 years and received full backdrop at age 55. 
No. Anyone who does not retire directly from state employment (within 60 days from their last day of state employment), does not get the automatic $5,000 in basic life insurance coverage at no cost to them.

The state will continue to pay for $5,000 of basic life insurance coverage for life for retirees who meet the following conditions:

•         They had basic life insurance coverage as an active employee and did not terminate coverage at retirement.
•         They have a MOSERS retirement date that is within 60 days of when they left state employment.

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BackDROP & State Taxes

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Does my backdrop withdrawals add to my state pension income which adds to my state taxable income that effects my state tax exemption?
Yes, the BackDROP distribution is considered taxable income for the year in which you receive the payment unless you roll it over to a traditional IRA or another eligible employer plan, such as MO Deferred Comp. A popular reason to roll the lump-sum payment into the deferred compensation plan is that it allows employees to defer taxes on the payment until those assets are distributed in retirement. There is a helpful publication on MO Deferred Comp’s website called Thinking About the BackDROP? 

Any withdrawal after retirement is taxable in the year of the withdrawal.

We suggest you speak to a tax professional or financial advisor for advice specific to your situation. For more information about state taxes, or the Public Pension Exemption, please contact the Missouri Department of Revenue or go to: www.dor.mo.gov/personal/ptc/pension.php.

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Final Average Pay Calculation

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I'd always thought retirement benefits were based on the highest pay of our state employment career. I was told by a coworker who recently attended a pre-retirement seminar that once you become eligible (under the rule of 80 for MSEP employees), that the highest pay rate considered for retirement benefits is already locked in and pay increases after that point will have no impact on retirement benefit. Please advise.
What you heard is not necessarily true – so thanks for checking with us! Whether or not pay for a given period will be considered in determining your final average pay (FAP) depends on if you elect BackDROP* (if eligible); not when you hit “80 & Out”.

To calculate your pension benefit, we will use your highest 36 full consecutive months of pay – wherever that occurs in your individual pay history. Practically speaking, most people earn their highest 36 consecutive months of pay in their last three years of state employment, but not always. If you become eligible for and elect the BackDROP upon retirement, your FAP will be calculated using your MOSERS-covered work history prior to your BackDROP date. In other words, pay (and service) during the BackDROP period is excluded when calculating your monthly benefit amount.

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 (regardless of whether that is before or after you might hit “80 & Out”) and will use that in calculating your monthly benefit. You may elect not to take BackDROP if you want all of your pay and service to count. In most cases, opting not to take BackDROP will increase your monthly benefit amount.

*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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Public Pension Exemption

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Will state pension still be tax exempt for 2018 pension?
If you are referring to the Public Pension Exemption, we are unaware of any changes to it compared to the previous year. This means that you may not have to pay Missouri state taxes on some or all of your MOSERS pension. See the articles in the Fall/Winter issue of RetireeNews and PensionsPlus (for those getting ready to retire). For more information about taxes, please contact the Missouri Department of Revenue or go to: www.dor.mo.gov/personal/ptc/pension.php. Print Friendly and PDF

1099-R Tax Form

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We received two questions about 1099-Rs recently:
1. When will 2018 1099-R be on-line?
2. Why can I not receive/access my 1099R online ? It would seem to me that it would save thousands of dollars.
You can access an electronic copy of your 1099-R after we have mailed it, which will be by the end of January. Simply log in to your MOSERS Member Homepage and you will find it listed under Personal Information. Watch our website or see this article on taxes from the Fall/Winter issue of RetireeNews for more information.

We appreciate your comment indicating you would be ok getting it online only and that it would save money. We have taken that approach with our other publications and correspondence - based on individual member preference. The 1099-R is one document that we still make available to all retirees both in hard copy and online. The decision to do so is based on our experience with retiree preference and needs. However, we will certainly take your suggestion into consideration for future planning.

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Calculating Final Average Pay

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Does MOSERS use the pay period end date or the check issue date when calculating the highest 36 consecutive months?
In our calculation of final average pay, we credit you based on when the payroll was earned, rather than the month it was actually paid. To calculate your pension benefit, we will use your highest 36 full consecutive months of pay –wherever that occurs in your individual pay history. Practically speaking, most people earn their highest 36 consecutive months of pay in their last three years of state employment, but not always*.

*Note: If you become eligible for and elect the BackDROP upon retirement, your FAP will be calculated using your MOSERS-covered work history prior to your BackDROP date. In other words, pay during the BackDROP period is excluded when calculating your monthly benefit amount.

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Travel Assistance

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I need to know if we still have Travel Assistance thru The Standard? I was told it might change beginning 1-1-19 and I will be leaving on a trip out of the US. I am retired & live in Fl. now. It also paid anything over 100 miles from home. Any information will be greatly appreciated.
Yes, members and retirees who have MOSERS basic life insurance* are eligible for travel assistance when traveling at least 100 miles from home or in a foreign country. Family members, including a spouse and children through age 25 are also covered. Medical assistance is one of the services they provide, including locating medical care, 24-hour access to nurses by phone, and emergency transportation services. (Please note: Travel assistance is not the same as travel health insurance. Please contact your health insurance provider regarding health care coverage when travelling.)

The updated travel assistance brochure on our website also has information in case you need information before your trip, such as passport and visa information, currency exchange, and inoculation requirements. There is an article in the Fall/Winter newsletters in as a reminder of the travel assistance benefits. All you need to do is print the wallet card with the worldwide phone number and bring it with you.

*MOSERS' life insurance is not available to employees of the Department of Conservation or state regional colleges/universities except for Lincoln University and State Technical College of Missouri.

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