Showing posts with label Refund of Contribution. Show all posts
Showing posts with label Refund of Contribution. Show all posts

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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4% Contribution for MSEP 2011

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My daughter is considering becoming employed for a state agency and is curious if she will be required to put a % of her pay check towards her retirement since she will be hired after the 1/1/2018 and the new rule that is in place.
Yes, 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 daughter's 4% contribution is used to help pay the cost of her future defined benefit retirement plan and could potentially pay her back far more than she contributes. See a simplified example in The Value of Your Retirement Benefit. When she retires, she will receive a benefit payment every month for as long as she lives. This means she can never outlive her MOSERS retirement benefit.

If she leaves state employment prior to becoming eligible for normal retirement, she may request a refund of her contributions plus credited interest. Or, she may leave her contributions with the system if she thinks she 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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Lump-Sum Payment Options

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If I resign before my retirement date and am vested is there an option to take a lump sum payment? To either rollover into a personal IRA or cash out. If so how do I figure that amount?
No, there is currently no lump-sum option in the scenario you described. If you are vested with MOSERS (you have at least 5 years of service) and then leave state employment prior to reaching the age to qualify for retirement eligibility, you would be considered a “terminated-vested” member. You will become eligible to begin drawing your lifetime monthly benefit payments once you also meet the age requirement (and all other legal requirements) and retire under a MOSERS defined benefit pension plan. 

The scenarios in which a lump-sum option are available through MOSERS are the following:

1. BackDROP – Work in a MOSERS benefit-eligible positon at least two years beyond normal retirement eligibility and then you can elect a lump-sum payment at retirement in addition to your lifetime monthly benefit payments.

2. Refund of Member Contributions – If you are a member of the MSEP 2011 or Judicial Plan 2011 (first employed in a MOSERS benefit-eligible position on or after 1/1/2011 and contribute 4% of our pay to MOSERS) and you leave state employment prior to reaching normal retirement eligibility, you may request a refund of your member contributions.

3. If you meet the qualifications for the Cash Out program (available only to vested members of MSEP who left state employment between 10/1/1984 and 9/1/2002) or a “Buyout” program authorized by the legislature (among other eligibility criteria, you must not have worked in a MOSERS or MPERS benefit-eligible positon at any time since 6/30/2017), you may be eligible for a lump-sum payment. However, no one currently employed in a MOSERS benefit-eligible position is eligible for either the Cash Out or Buyout lump-sum program.

Keep in mind that any of the following may affect your retirement eligibility: Your retirement plan (MSEP, MSEP 2011, etc.), age, service, and if you retire directly from active employment versus leaving state government and waiting to retire. Contact a MOSERS benefit counselor to discuss your specific situation. You may also contact a MOSERS benefit counselor to request benefit estimates for various scenarios (including a scenario of leaving employment prior to retirement eligibility).

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MSEP 2011 Retirement Eligibility

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Vesting is changed to 5 years, so why is the monthly benefit not payable until 10 years? If I were to retire after 8 years, would I receive a lump sum payout of my contributions plus any amount vested by the plan, or would the benefit be deferred until after 10 years?
Vesting is one part of retirement eligibility. The other part is age. Both vesting and age requirements must be met in order to retire under a MOSERS defined benefit plan. As a member of MSEP 2011, you will become eligible for normal retirement when you have at least 5 years of service and reach age 67 OR under the “Rule of 90” which is when you are at least age 55 and your age plus service equals 90 prior to you leaving state employment.

Once you are vested with MOSERS, even if you leave state employment, you will be eligible for lifetime monthly benefit payments once you also meet the age requirement (and any other legal requirements) and retire under a MOSERS defined benefit pension plan. The 5-year vesting for MSEP 2011 members went into effect on 1/1/2018 and MSEP 2011 members must be actively employed on or after 1/1/2018 to be covered by this change.

Your contributions go toward helping pay for your future lifetime monthly benefit payments. You will receive a lump-sum payment only if you request a refund of your member contributions. By taking a refund, your forfeit all your credited service. If you are vested and take a refund, you give up your future lifetime monthly benefit payments.

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Refund After Termination?

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What happens to the money in your retirement fund if you start a new career before retiring? Can you still collect it?
Yes, you may still be able to collect it, but your options and the details of how depend on which plan you belong to, if you are vested or not, and if you take a refund of your member contributions or not if you are a member of MSEP 2011.

If you are vested with MOSERS (you have at least 5 years of service in MSEP or MSEP 2000 or at least 10 years in MSEP 2011) and then leave state employment, you will be eligible for a lifetime monthly benefit which will begin once you meet the age and all other legal requirements and retire under a MOSERS defined benefit pension plan. This provides financial security because, with a defined benefit pension plan, you can’t “outlive your money”. Here are more details:

•         If you are a member of MSEP 2011, you pay contributions to help fund the system. Upon termination of employment, you may request a refund of your contributions* or you may leave your contributions with MOSERS.

o   By receiving a refund of contributions, you forfeit all your credited service and any future rights to receive benefits from the system, but you get a check equal to the amount of contributions you made plus any interest.

o   If you leave your contributions with MOSERS and later return to a MOSERS or MPERS benefit-eligible position, after 12 continuous months of service, you will begin adding to your previous service and working toward a possible future pension benefit. (Contributions from a terminated vested member of MSEP 2011 will continue to accrue interest annually until the member is eligible for normal retirement or withdraws the contributions. Contributions from a terminated non-vested member will not accrue interest.)

•         If you are a  member of MSEP or MSEP 2000, your employer pays the necessary contributions into our system so that you may draw a future retirement benefit. Since those members do not pay these contributions, they are not eligible for a refund.

* Please Note - By receiving a refund, terminated MSEP 2011 members forfeit all their credited service and any future rights to receive any retirement and long-term disability benefits, and rights to coverage through Missouri Consolidated Health Care Plan (MCHCP) other than as a dependent under provisions of COBRA.

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Death Before Retirement

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What happens to money that is in an individuals retirement account if he/she passes away before retiring?
Members do not have individual retirement “accounts” with MOSERS; they earn benefits payable to them or their eligible beneficiary(ies).

If you are a general state employee, married, vested* in MOSERS, and die before retirement, your eligible surviving spouse will receive survivor benefits. The monthly benefit for your spouse will be based on the benefit you have accrued as of your date of death and calculated according to the Joint & 100% Survivor Option. The survivor benefit will be paid monthly for the remainder of your spouse's lifetime. Benefit payments can begin the first of the month following your date of death,  but your spouse must submit an Application for Survivor Benefits and any necessary documentation.

If there is no eligible spouse, a survivor benefit may be paid to your natural or legally adopted child(ren) who are younger than age 21. This benefit is dependent on the law in effect at the time of your termination. If there is more than one eligible child, the benefit will be divided equally among them. The survivor benefit for each child will stop when the child becomes age 21 (unless a child is totally disabled and you terminated service with the state on or after 8/28/2001).

If  you die without any eligible survivors, no retirement benefits will be paid on your behalf. The state’s annual contribution is pooled with investment returns (and employee contributions from MSEP 2011 members) to fund the retirement system. If you made employee contributions to MOSERS and die without any eligible survivors, a refund of your contributions will be made to the beneficiaries you have listed on your Contribution Beneficiary(ies) form or otherwise according to law.

On a related issue, we encourage you to make sure your life insurance beneficiaries are current (if you have life insurance with MOSERS) so proceeds will be paid according to your wishes.

If your circumstances are different than those described above, you may contact a MOSERS benefit counselor who can help you understand how the law would apply in your specific situation.

*If you aren’t sure which plan you belong to or the vesting requirement, check the Which Plan Am I In? section of MOSERS’ website.

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Are Member Contributions Mandatory?

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I have heard that there is no way to stop paying into my retirement and collect what put into it until I terminate my employment. Is there a way to stop putting money into the retirement plan, and or take the my money out of it?
No, the 4% contribution of gross pay towards your defined benefit is mandatory for all MSEP 2011 members.
If you leave state employment before becoming eligible for normal retirement, you may request a refund of your contributions. If you aren’t planning to return to work for the state, your options are:
  • Rollover the total amount of your contributions plus interest into an IRA or qualified retirement plan.*
  • Elect a combination rollover and cash payment (less applicable mandatory withholdings and IRS penalties).*
  • Request a full refund (less applicable mandatory withholdings and IRS penalties).*
Please see the Member Contributions (MSEP 2011) brochure on our website for more information.

Also, please note that a refund will not be processed  until the Request for Refund of Contributions Application is completed and returned to MOSERS. Refunds will be paid 90 days from the date of termination of employment or the request for refund, whichever is later and will include all contributions you paid to MOSERS. The refund of contributions becomes irrevocable on the day that MOSERS mails or electronically transfers payment.

If you have made contributions to MOSERS, leave state employment, but think you may return to work at some point in the future, you don’t have to request a refund. If you return to a job covered by MOSERS and you left your contributions intact, your previous service credit will be combined with your new service credit to qualify for retirement. You will resume making member contributions.

* Please Note - By receiving a refund, terminated members forfeit all their credited service and any future rights to receive any retirement and long-term disability benefits, and rights to coverage through Missouri Consolidated Health Care Plan (MCHCP) other than as a dependent under provisions of COBRA.

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MSEP 2011 Refund of Contributions

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I have been hired for a position with the state of Missouri. I understand that you must have ten years of service to be vested in MOSERS. I am 60 and will most likely not work 10 more years. What will happen to the money that I paid into the retirement system during the years I do work? Will I receive these funds back when I resign from my position that is part of MOSERS retirement?
If you are a member of the MSEP 2011, there is a ten-year vesting period. If you leave state employment before becoming vested, you may request a refund of your contributions. If you aren’t planning to return to work for the state, your options are:
  • Rollover the total amount of your contributions plus interest into an IRA or qualified retirement plan.*
  • Elect a combination rollover and cash payment (less applicable mandatory withholdings and IRS penalties).*
  • Request a full refund (less applicable mandatory withholdings and IRS penalties).*
Please see the Member Contributions (MSEP 2011) brochure on our website for more information.
Also, please note that a refund will not be processed  until the Request for Refund of Contributions Application is completed and returned to MOSERS. Refunds will be paid 90 days from the date of termination of employment or the request for refund, whichever is later and will include all contributions you paid to MOSERS. The refund of contributions becomes irrevocable on the day that MOSERS mails or electronically transfers payment.

* Please Note - By receiving a refund, terminated members forfeit all their credited service and any future rights to receive any retirement and long-term disability benefits, and rights to coverage through Missouri Consolidated Health Care Plan (MCHCP) other than as a dependent under provisions of COBRA. 

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Divorce and Your Benefit Payment

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We’ve received several questions regarding divorce and your benefit payment. Here’s a breakdown of how divorce may affect your benefit payment:

Can my retirement benefit be divided if I divorce my spouse?

Yes, your retirement benefit from MOSERS may be considered “marital property.” If you were married at any time while actively employed in a MOSERS benefit-eligible position and are considering a divorce after vesting, your spouse may be legally entitled to receive a portion of your retirement benefit. Any amount up to 50% of the benefit accrued during marriage may go to your ex-spouse.  If you are not vested, you are not owed a future retirement benefit from MOSERS, and therefore there is nothing to divide.

What do I need to do to divide my benefits?

Your benefit is not automatically divided at the time of your divorce.  Here’s what we need you to do:
  1. You should discuss divorce proceedings with your attorney. Ask about your rights and options regarding marital property.
  2. Fill out our Division of Benefits (DBO) Estimate form and mail it to MOSERS or complete and submit it online.
  3. We will mail a DBO packet to you with a benefit estimate.
  4. Your attorney will need to prepare a DBO according to our sample packet and submit it to us for approval prior to your court date.
  5. Have the approved DBO signed by the appropriate parties, including the judge.
  6. Send the certified DBO to us.
As an alternative to the DBO, you may choose to divide the present value of your retirement at the time of divorce as a part of your property division. If this is your preferred route, we recommend you contact a professional who specializes in this service.

What happens if I already got divorced (prior to retiring)?

If you are already divorced, future retirement benefits may have been addressed in your divorce decree. Read through it and see. If you don’t have a copy, you may be able to get a copy from the county where the divorce took place. You may contact a MOSERS benefit counselor to discuss the matter and how it applies in your specific situation.

If your ex-spouse is entitled to a portion of your retirement benefits, their benefit payments will begin when you retire. Like your benefits, your ex’s benefits and COLAs will be based on the plan you retire under.  Your ex will not receive any formula increases, temporary benefit, or any portion of your BackDROP payment.

If you are in the MSEP 2011 and divorce before vesting, your ex may be eligible to receive a portion of your refunded contributions. You are not eligible to request a refund if your retirement benefit is subject to a division of benefit order.

What happens if I get divorced after retiring?

Your ex-spouse’s benefits will begin the month after your DBO is issued. If you get a DBO after you divorce, your ex will not receive back payments.  Upon death of either party, the DBO will automatically terminate. But if your ex dies, let us know! You may be eligible for a pop-up in your benefit.

You cannot change (even after divorce) your benefit payment option after your first benefit payment is mailed or electronically transferred by MOSERS. For example, if you elected a Joint & Survivor option upon retirement, and later get divorced, your ex-spouse is still eligible to receive benefits upon your death. You cannot designate a new retirement beneficiary. However, you can change your beneficiary on your life insurance.

What if I want more information?

You can read our Divorce & Your Retirement brochure or speak with a MOSERS benefit counselor.

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Refund of Contributions for MSEP 2011

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A relative of mine has recently become a full-time state employee, but expects to work only two or three years. Since she won't become vested, will she be able to recoup her contributions to the retirement system?
Yes. An MSEP 2011 member who leaves state employment prior to becoming vested (10 years) may request a refund of their contributions. Interest will not continue to accrue on their contributions if they terminate employment prior to becoming vested. Members leaving a MOSERS-covered position have a number of options available for managing their pension assets. They may:
  • Option 1 - Leave their contributions with MOSERS (if they expect to return to a MOSERS-covered position.)
  • Option 2* - Rollover the total amount of their contributions plus interest into an IRA or qualified retirement plan.
  • Option 3* - Elect a combination rollover and cash payment (less applicable mandatory withholdings and IRS penalties).
  • Option 4* - Request a full refund (less applicable mandatory withholdings and IRS penalties).
Please see the Member Contributions (MSEP 2011) brochure on our website for more information.

* Please Note - By receiving a refund, terminated members forfeit all their credited service and any future rights to receive any retirement and long-term disability benefits, and rights to coverage through Missouri Consolidated Health Care Plan (MCHCP) other than as a dependent under provisions of COBRA. 

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A Two-Part Question

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1- What is this Fiscal Year's % of reserves to obligations?
In terms of system assets relative to the value of liabilities, during the year ended June 30, 2013, the funded ratio of the Missouri State Employees’ Plan, was 72.7%.  The FY14 actuarial valuation is currently in process and that information will be completed and presented to the board in September. We will post that information to our website once it has been finalized.
2- With the new retirement plan, if an employee contributes their 4% for 9 years and then retires before vesting, do they get any return?
If you are an MSEP 2011 member who leaves state employment prior to becoming vested, you are not entitled to a future retirement benefit. However, as a member of the MSEP 2011, you may leave your contributions with MOSERS if you think you may return to state employment in the future. Interest will not continue to accrue on your contributions if you terminate employment prior to becoming vested. You may request a refund of your contributions only if you are no longer working in a MOSERS benefit-eligible position. As a member leaving a MOSERS-covered position, you have a number of options available for managing your pension assets. You may:
  • Option 1 - Leave your contributions with MOSERS (if you expect to return to a MOSERS-covered position.)
  • Option 2* - Rollover the total amount of your contributions plus interest into an IRA or qualified retirement plan.
  • Option 3* - Elect a combination rollover and cash payment (less applicable mandatory withholdings and IRS penalties).
  • Option 4* - Request a full refund (less applicable mandatory withholdings and IRS penalties).
Please see the Member Contributions (MSEP 2011) brochure on our website for more information.
* Please Note - By receiving a refund you forfeit all your credited service and any future rights to receive benefits from the system.

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Refund of Contribution in MSEP2011

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I am currently a full-time employee at Missouri State University. I began in 2013 so I need ten years to become vested in the program. If I don't believe I will be staying for ten years is there any way that I can have the money set aside for retirement for me moved into a private investment account like TIAA-CREF or something along these lines? I'd be more specific, but I'm not entirely certain as I only heard this through a friend. Thank you so much for your time.
Members hired in a benefit eligible position for the first time on or after 1/1/2011 must contribute 4% of their gross pay toward their retirement benefit. These contributions are mandatory for each member. These members have both employee and employer contributions. While actively employed, the employee portion of the contributions accrues interest each year in June based on the prior July balance. Interest will not continue to accrue on your contributions if you terminate employment prior to becoming vested. However, upon termination you may elect to roll over your portion of the contributions to a qualified retirement plan, such as TIAA-CREF. Members of the MSEP2011 can check account balances online by logging into the secure portion of our website.

If you leave employment prior to becoming vested (achieving 10 years of service), you can request a refund of the contributions you paid to the system. You can request that the refund be paid to you directly as a cash payment, or you can roll the funds into an eligible IRA or employer plan.

Refunds will be paid 90 days from the date of termination of employment or the request for refund, whichever is later and will include all contributions you paid to MOSERS. A refund will not be processed  until the "Request for Refund of Contributions Application" is completed and returned to MOSERS. The refund of contributions becomes irrevocable on the day that MOSERS mails or electronically transfers payment.

Please be aware, by receiving a refund you forfeit all your credited service and future rights to receive benefits from the system. If you later become an employee and work continuously for a least one year, the credited service previously forfeited will be restored IF you return to the system the amount previously refunded plus interest at a rate established by the MOSERS board.

For more information, please review our MSEP2011 General Employees' Retirement Handbook: https://www.mosers.org/Members/Handbooks.aspx


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Can I Get Back What I've Contributed to MOSERS if I'm in MSEP2011?

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I've been with the state for two years and five months now. Since I started after Jan, 2011, I've contributed a percentage of my paycheck to my retirement. If I quit, do I get that money?
Yes, you may choose to receive a refund of your member contributions. If you leave state employment prior to becoming vested (10 years), you are not entitled to a future retirement benefit. However, you may leave your contributions with MOSERS if you think you may return to state employment in the future. Please see “Your Refund Options” on page 4 of the Member Contributions Brochure for other options. Interest will not continue to accrue on your contributions if you terminate employment prior to becoming vested.

If you leave state employment after becoming vested, you will be eligible to receive a retirement benefit from MOSERS at some point in the future, once you meet both the age and service requirements. If you leave state employment prior to retirement, interest will accrue annually on your contributions until you withdraw the funds or reach normal retirement eligibility.

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