MOSERS Rumor Central

Is MOSERS Going to "Run out of Money?" No!

2012-01-26T08:36:00.000-06:00

Two Rumor Central questions that we've received aresimilarly themed:

Question1: Hello, I am retired and I saw on the news last night (Fox) where anumber of states employee pension plans are in trouble. They talk about that alot but what was different last night was that Missouri is now on the list. I'mconservative and I know that MOSERS over the years did a pretty good job ofinvesting our money. Of course they had a fellow on saying that the stateswould have to cut benefits, not raise taxes. Is there any truth to this report?

Question2: Please provide me with the information regarding a statement in thenews that the State of Missouri will be out of money for retirees in 2021. Thank you.

Backgroundon the media reports

Recently, theCenter for Retirement Research published an issue brief which included theoretical“run-out dates” for 126 public pension plans, including MOSERS. The purpose oftheir issue brief was to illustrate the effect of proposed changes toaccounting standards for the valuation of assets and liabilities of publicpension plans. Unfortunately many media outlets have been circulatingthese “run-out dates” without regard to the rest of the brief. As notedin the conclusion of the brief:

“It would be unfortunate if the press and politicianscharacterized these new numbers as evidence of a worsening of the crisis when,in fact, states and localities have already taken numerous steps to put theirplans on a more secure footing.”

Unfortunately,that characterization is exactly what has happened. The theoretical“run-out date” of 2021 is inaccurate and irrelevant.

Missouri State Employees Retirement System

Your concernsare understandable given all of the local and national negative press regardingpublic employee retirement systems that we have seen since the “greatrecession” began in 2008. The most important message we have is to assureyou that your benefits are secure.

The two mostimportant factors in assuring that the plan is financially sound are that thecontribution rates be based on reasonable assumptions about the future and thatthe contribution amounts computed by the actuary actually be contributed by theemployer. The MOSERS’ actuary conducts an experience study every five years forthe purpose of determining if any fine tuning to the assumptions is warranted –such an experience study will be presented to the MOSERS’ board oftrustees in March and the board will determine whether or not changes should bemade prior to certifying the contribution rate in September. Regardingcontributions, without exception, the state has made the annual requiredcontributions, as determined by the actuary.

2 Questions: Survivor Options and BackDROP

2012-01-23T13:22:00.000-06:00

Two questions:

1.When I retire, if I elect 100 or 50% survivors for my spouse, what happens tomy benefits should I outlive my spouse?

2. If I am 5 years past 80 & out but elect to stay with the state until age62, would I still be able to choose backdrop as an option?

If you elect the Joint and 50% or 100% survivor option and yourspouse precedes you in death, your benefit will revert (pop-up) to the life income annuity amount, the amount before a survivor reduction.The effective date of the pop-up will be the first of the month following yourspouse’s date of death. The pop-up is not automatic. You must provide MOSERSwith a photo copy of your spouse’s death certificate before your benefit willbe adjusted. If you then remarry and choose to elect one of the survivorbenefits for your new spouse, you must do so within one year of your date ofmarriage.

BackDROP is available for members who continue to work at leasttwo years past their first eligible date of retirement. If you are firsteligible to retire because of 80 & Out, we will use that as your officialfirst date eligible. Any time you work past that date could be considered infiguring BackDROP.

Reemployment After Retirement and Your Pension

2012-01-23T09:38:00.000-06:00

A coworker retireetells me that he is allowed to work only a certain number of hours per year(50%) because if he works more, his pension will stop. Please clarify.

If you retire and later return to work for the state ofMissouri, in a benefit-eligible position covered by MOSERS, your retirementbenefit will be stopped. Your employer determines if you are working in abenefit-eligible position.

A benefit-eligible position is one that is permanent andnormally requires the performance of duties during not less than 1,040 hoursper year. If you return to work for the state in a benefit-eligible position:

Your monthly retirement benefit from MOSERS stops for ANY monthwhich you are actively employed in that position.

You will accrue additional service credit for periods ofreemployment greater than 12 months.

When you retire again, your benefit will be equal to the monthlybenefit you were receiving PLUS an additional monthly benefit for the serviceearned during reemployment periods of 12 months or more.

Working for the state in a position that is not deemedbenefit-eligible does not have any impact on your eligibility to continuereceiving a retirement benefit. You may work in that position and receive aretirement benefit from MOSERS.

If you have a question about whether or not a position will affect yourretirement benefit we advise you to check with your employer.

Pay Raise for Active State Employees?

2012-01-23T09:19:00.000-06:00

It's wonderful thatretirees are getting a COLA but what about a raise for active employees?
Thank you.

The FY13 budget as introduced by the Governor includes a 2%,across-the-board pay raise for state employees starting January 1, 2013. Thatbudget still has to make its way through the appropriations process, duringwhich changes can occur. The FY13 budget will be final in May 2012.

Salary Changes and BackDROP

2012-01-17T14:00:00.001-06:00

If one gets promoted, demoted or otherwise has apay change after their 80 and out date does it change their time table for backdrop?

Pay changes do not affect the “timetable” for becoming eligiblefor BackDROP. They may, however, affect the amount of your benefit. In order to understand those implications, you are encouraged to contact abenefit counselor for answers specific to your situation. You may do so duringour normal business hours by calling 800.827.1063, option 4.

HB 1139 - Retirement Incentive Eligibility (2012)

2012-01-17T13:39:00.000-06:00

I am eligible forretirement through the 80 and out incentive on August 1, 2013. In reviewingHB1139, could I be eligible for this incentive or would I have to be eligibleprior to March 2013?

We generally don’t speculate on eligibility on proposedlegislation since it will most likely change over the course of the session. Shouldthe incentive as it is written be passed by the legislature, MOSERS wouldconfirm your eligibility for retirement at the time, should you be interestedin taking the incentive. In the event of the bill’s passage, MOSERS will besure all members who are eligible are aware of their eligibility and time framesinvolved. Keep in mind that many changes can take place during the legislativesession that doesn’t end until May. We encourage you to monitor actions thatare taken on it. See this recentRumor Central post for important links.

HB 1139 - Retirement Incentive (2012)

2012-01-10T13:29:00.003-06:00

Just reading Rumor Central regarding early retirement incentive legislation and there isactually a bill out there right now, HB 1139. Looks to be pretty similar to thebills proposed the [past] few sessions.

That is correct. HB 1139 was introduced on January 4, 2012 byRep. Gatschenberger. There is currently no hearing scheduled and the bill isnot currently on a House calendar. We encourage you and anyone who isinterested in this bill to monitor actions taken on it through the MissouriLegislature’s House andSenate Joint Bill Tracking System. This tracking site will include anyrevisions to the introduced bill if it moves through the process.

The Joint Committee on Public Employee Retirement Systems (JCPERS) also posts their legislative tracking sheet online. It lists all retirement bills for all systems.

The MOSERS Investment Portfolio (MIP) Fund

2012-01-10T11:36:00.000-06:00

Awhile back, we received this question: Now that the Boardestablished a trust fund, when will deferred comp members be able to invest inMOSERS?

Here was the answer then:

MOSERS has beenstructured as a trust fund since its inception. That has not changed. What youmay be referring to is that in 2007 MOSERS assumed oversight of the State ofMissouri Deferred Compensation Plan. The MOSERS Investment Portfolio (MIP) fundwill be a monthly (rather than daily) liquidity investment option available toparticipants in the State of Missouri Deferred Compensation Plan. This fundwill offer participants the opportunity to purchase units of the MOSERSinvestment portfolio. Staff is currently working with the record-keeper andcustodian on the logistics associated with offering this type of monthlyunitized option. We expect the fund to be available during the first part of2012. When an official live date is determined, participants will receivenotification and additional information via the plan website at www.modeferredcomp.org and the plan’squarterly newsletter - Simply Put.

More recently, we received this question: Do you have anyadditional information on the investment option described

The response to the follow-up question is below:

Weare still waiting on a definitive “live” date confirmation, but we expect thatit should be live by the end of the second quarter, assuming that allprogramming/testing goes as planned. Assuming this timing, Plan participantswill see communications on the fund in the first quarter newsletter (which willaccompany the March 31^st statement) and on the plan website (www.modeferredcomp.org) in April.

Retiree Survivor Benefits and COLAs

2012-01-09T12:09:00.003-06:00

Will MOSERS RetireeSurvivor benefits also go up by 3.6% as Social Security is doing in January?When does MOSERS give COLA raises?

Social Security benefits are separate from MOSERS and do not impact the benefit you receive from us. As defined by Missouri state law, the MOSERS annual Cost of Living Adjustment (COLA) rate is equal to 80% of the percentage increase in the average Consumer Price Index (CPI-U) from one year to the next , as established by the federal government. The COLA rate for 2012 will be established later this month. COLAs occur on the anniversary of your retirement date, however, if you converted from the MSEP to the MSEP2000, then your COLA anniversary date is July 1. For more information on COLAs, please review the COLA section of our website.

Survivor Benefits

2012-01-09T11:58:00.000-06:00

If I choose Joint& 50% or 100% survivor when I retire, what happens if my spouse does NOToutlive me?

If you choose a joint survivor option at retirement, and you’vetaken a reduction on your monthly benefit to provide that benefit to yourspouse, if your spouse precedes you in death, your benefit would then “pop-up”or revert back to the life income annuity amount.

For more information regarding survivor benefits, please review the “survivor” section of ourwebsite.

Missouri Public Pension Exemption

2012-01-09T10:27:00.000-06:00

I have heard fromrecent retirees that starting in 2012 there will not be any taxes deducted frommy retirement check, is this correct or if it is not, what could they betalking about?

Youmight be referring to the Public Pension Exemption. We ran a story about it inour 2010 Winter Newsletter.Another story about it is in our 2011 Winter Newsletter.

Purchasing "Air Time" Service

2012-01-09T10:13:00.000-06:00

I've heard about "air time", i.e theoption to purchase service. I'm aware of the option to purchase certain typesof service but "air time" is different. Does MOSERS currently havethis provision in place?

Presently we do not have any provision in place allowing forpurchase or transfer of "air time." Our provisions allow for the purchasetransfer of active military service and public employment within the State ofMissouri.

For those who are unaware, "air time" means a person just wants to buy service – service not tied to any actualservice performed in another organization. There is no provision in Missouri state law that allows a person to buy service that is not tied to military or other public service.

2012 Retirement Incentive?

2012-01-03T11:23:00.000-06:00

I know it is early, but are there anylegislative propals for retirement incentive in 2012?

The 2012 legislative session starts January 4, 2012. There havebeen no formal bills filed on a retirement incentive at this time. We encourageyou to monitor legislation as it is introduced and moves through thelegislative process by visiting the MissouriHouse of Representatives and MissouriSenate websites.

COLAs and the Select-A-Date Retirement Calculator

2012-01-03T11:21:00.000-06:00

When using the "select a date"retirement calculator, and projecting a retirement date into the future, do youapply a COLA or other increasing factor to the current salary for theintervening years, or is it projected that one will remain at one's currentsalary throughout that time?

When you log into the Secure Member Area of our website and usethe “Select a Date Estimate” function, the monthly benefit amount you are firstgiven does not take into consideration any future COLA increases you mayreceive.

To see what your benefit might look like with COLA increases,the system gives you the chance to project your future benefit with COLAincreases if you wish. Once you select your retirement date and are on thescreen with your monthly benefit amount, simply click on your choice ofsurvivor options from those given and hit “Project COLAs.” You will then beasked to select the COLA rate you wish to use from a drop down box. (MOSERStypically uses the average of 2.0% when projecting future amounts for members,however the actual COLA rate is different each year and not known untilmid-January.)

MOSERS Pension and Social Security

2011-12-08T08:40:00.001-06:00

Is it true that aretired state worker's pension is reduced by the amount of social security thatthe person would receive when they reach their retirement age for social security?

No,that is not correct. Under the MSEP 2000 provisions, members who retire underRule of 80 receive a benefit for life plus a temporary benefit payableto age 62 – that temporary benefit is intended to provide a financial bridgefrom the time the member retires until reaching eligibility for social securityretirement benefits.

Tax Withholding Form Question

2011-11-22T14:00:00.001-06:00

I have a question about the Tax Withholding formin the retirement application. If I would only type in Married, and 2allowances, Is this all that is needed? Is the additional federal amount, onlyif you want more taken out of your check? Should the 2 allowances be entered ifa person is married?

If you elect "Married" with 2 allowances, you do not need to choose an additional withholding amount unless you would like more to be withheld.

There is a federal tax calculator located on our website that will help estimate your tax withholding amount based on difference scenarios.

Purchasing Active Duty Military Service

2011-11-22T13:52:00.001-06:00

I heard that at one time the state was thinkingabout letting vets add up to 4 years of their military service to their statetime, is there anything in that way still going on?

In 2008 and 2009 legislation was filed that would have provided twoyears of MOSERS’ service to state employees with certain military service ifthey had been employed by the state for more than 10 years. Since theadditional service was at no cost to the employee it did have a substantialfiscal note cost. Those bills did not pass and there was no bill likethis last year.

The only optionavailable now is purchasing up to four years of service at a subsidized rate.You can read more about that at this link. Look for the “Application to Purchase Active Duty MilitaryService” under “Service Credit.”

Transferring from CURP to MOSERS

2011-11-10T10:50:00.001-06:00

When I transfer from CURP to MOSERS next year,after my 6 wasted years, I will become automatically vested. The question Ihave is will I be considered as a "new hire" and hence be forced topay the extra 4%? OR will my service be counted from my start date in 2006?

Since you were first hired in a CURP eligible position in 2006,you will be a member of the MSEP2000 plan after you elect to become a member ofMOSERS and you will not be required to contribute 4% of your salary toward yourretirement. You are correct that you will become immediately vested inMOSERS, however, you will not receive any retirement service credit in MOSERSbased on your service covered under CURP.

Re-employment After Retirement: Elected to the Legislature

2011-11-03T14:05:00.000-05:00

If a former state employee, who is receiving aretirement check for their years of service is elected to the legislature, dotheir retirement checks stop while serving in the legislature?

Yes, if a former state employee is retired and subsequently is electedto the legislature, their retirement benefit would be stopped while they areserving their term. The details of reemployment after retirement by plan arebelow:

MSEP

MOSERSmembers reemployed in a MOSERS benefit eligible position will receiveadditional service credit and retirement benefits from MOSERS for periods ofreemployment greater than 12 months.

MSEP2000

Membersreemployed in a MOSERS benefit eligible position will receive service creditand retirement benefits from the system that covers that position for periodsof reemployment greater than 12 months.

MSEP2011

Membersreemployed in a MOSERS benefit eligible position will receive service creditand retirement benefits from the system that covers that position for periodsof reemployment greater than 12 months.

BackDROP in 2012

2011-11-03T13:25:00.004-05:00

Is the Backdrop stillin place for 2012?

BackDROP remains unchanged for members who aremembers of either the MSEP or the MSEP2000 plan. For members in the MSEP2011plan, who were hired for the first time in a benefit eligible position on orafter January 1, 2011, BackDROP is no longer an option at retirement. You cansee a summary of benefits chart for each of the three plans at this link.

We encourage you to contact one of our benefit counselors todiscuss individual circumstances. You don’t need an appointment, so you cancall or come in anytime during our normal business hours, M-F 7:30 a.m. – 4:30p.m. or call 800.827.1063, option 4.

2012 COLA for Retirees Unknown Until Mid-January

2011-11-03T13:17:00.000-05:00

Are retirees going to get a COLA raise in 2012and if so, how much?

At this point, we don't know if there will be a cost ofliving adjustment (COLA) in 2012. We will not be able to make a determinationuntil mid-January at which time we will have the complete picture of theConsumer Price Index for all of 2011. COLA rates are determined in January, andwe will inform members of the COLA rate at that time.

Here's a link to a September, 2010 post indicating statutory language that governs COLAs.

Three Questions Regarding Legislator Retirement

2011-10-19T14:50:00.000-05:00

In regard to members of the Missouri Legislature, istheir retirement through MOSERS?

Yes.

If so, is their retirement based on only their salary ORsalary plus per Diem?

Legislator retirement benefits vary by plan. Per Diemamounts are NOT included in retirement benefit calculations.

· MSEP: Number of biennial assemblies x $150

· MSEP2000: (Active legislator’s pay ÷ 24) xservice (capped at 100% of pay)

· MSEP2011: (Active legislator’s pay ÷ 24) xservice (capped at 100% of pay)

Additionally, is their rate of becoming vested and payfor retirement the same as other regular state employees?
Legislator vesting requirements are the same for all plans: 3 full biennialassemblies (6 years). This is different than regular employee vesting requirements for the three plans (5 years for MSEP and MSEP2000; 10 years for MSEP2011). The differentialbetween the plans is again due to the fact that lawmakers do not have theoption of continuing in state service beyond 16 years due to reelection and termlimits.

Maximum Amount of Sick Leave Allowed at Retirement

2011-09-23T14:16:00.001-05:00

Is there a limit to the number of months sicktime you can use or convert to time when you go to retire. I have heard thatthe maximum number of months is 12 or one full year, but everything I find inwriting is it has to be in even monthly hours.

For every 168 hours of Sick Leave you have accrued but not used,you will receive one more month of service to increase your benefit amount.Sick Leave does not affect your eligibility to retire.

For retirement purposes, MOSERS cannot use any unused sick leavethat is in excess of 10 hours per month of your accrued service. Forexample, if you have 25 years of service (300 months), the maximum sick leavebalance that could be used in your retirement calculation is 3000 hours.

There are many Rumor Central posts about sick leave andretirement that you may find helpful. Simply search for “sick leave,” or click on one of the sick leave labels.