Showing posts with label Interest Accrual. Show all posts
Showing posts with label Interest Accrual. Show all posts

Contribution Balance

Posted on
For someone on the MSEP 2011 plan, is there a way to see the current balance of the 4% benefits withheld for retirement? If someone is planning on leaving before retirement eligibility it would be helpful to view the balance before making termination plans.
Yes, if you log into your MOSERS Member Homepage at www.mosers.org by clicking on the blue Member Login button, you can view a Contribution Calculator. It shows your current balance, based on the latest payroll information sent from your employer.

If you terminate employment from a MOSERS-covered position you may request a refund of your contributions including credited interest. However, you are not required to withdraw your contributions when you leave. If you are vested, MOSERS will continue to pay interest until you either withdraw the funds, reach normal retirement eligibility or die. If you think you might return to MOSERS-covered service, carefully consider your options because by receiving a refund, you forfeit all your credited service and future rights to receive benefits from the system. For vested members, this means forfeiting a lifetime monthly benefit at retirement age.

To see all of your options after leaving state employment, please see the Member Contributions brochure on our website.

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Interest Accruals on Contributions in the 2011 Plan

Posted on
I am a fairly new State employee so I am under the 2011 plan. I was checking on my contributions and noticed the following statement

Interest accruals occur on June 30th each year based on the account balance as of the previous July 1. Interest credits stop if you terminate employment and are not vested.

I started after July 1, 2011. The way I read this, I will not see any interest credit in my account until June 30th , 2013. By my calculations, I am losing interest credits on my money for the time it sat in my account from the day I was hired to June 30, 2012. That lost interest credit will not be compounded going forward for every year I am in MOSERS.

Am I correct? And since I'm not getting that interest credit, where is the interest going?
You are correct in your understanding of interest credits on employee accounts under the 2011 plan.  The System’s income from investments is earmarked for the payment of benefits to those who retire and for interest credits on individual member accounts of 2011 Plan members as stipulated by law.  The individual member account is not intended to be a savings account but rather is the member financed portion of the retirement benefit eventually received.  The plan itself is intended to serve as an incentive for employees to remain in service with the state and not a means of earning interest.  In fact, the vast majority of employees who do retire will receive substantially more in retirement benefits than the amounts in their individual accounts at retirement, with or without interest.

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