Showing posts with label benefit payment. Show all posts
Showing posts with label benefit payment. Show all posts

Retiree Payment Schedule

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After a person retires and receive their first retirement check, I am curious to know how will the be paid out? Will it be monthly, or bi-weekly?
Retirees are paid once a month, on the last working day of each month. If you enroll in direct deposit during the retirement process, your payment will be transferred electronically on that day. If you receive a paper check, it will be mailed on the last working day of the month. We encourage retirees to participate in direct deposit, since it is faster and more secure than a paper check.

You can view the payment schedule for the current year on our website, which we will be updating for 2019 soon.

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COLA This Year?

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I was just curious if there will be a cola this year and if so how much will my check be?
We calculate the COLA for benefit recipients each year. We do not know yet what the 2018 COLA rate will be because the required data is not yet available but we will calculate and announce it in mid-January. The COLA rate calculation is based on 80% of the percentage increase in the average Consumer Price Index (CPI) from one year to the next with a maximum increase of 5% (minimum 0%). The 2018 rate will be based on the comparison of the CPI in 2016 to 2017. COLAs are payable on the anniversary of your retirement date (for most retirees*).

Watch our website in January for more information, and learn more on the COLA page.  We will send you a notice, either in the mail or in your MOSERS Document Express online mailbox, when the COLA is applied to your monthly benefit payment.


  • Retirees who converted from MSEP to MSEP 2000 during the conversion window in 2000 have COLAs payable each year in July.
  • Retirees who elected a BackDROP will have COLAs payable each year on the anniversary of their BackDROP date rather than on the anniversary of their retirement date.
  • MSEP 2011 members hired after January 1, 2018 who leave state employment prior to retirement eligibility, will receive their first COLA in retirement on the second anniversary of their retirement.
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    BackDROP Payment

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    After retiring, how soon can I expect my BackDROP Payment?
    Your BackDROP1 payment (either cash or rollover) will be paid on the last working day of the month your retirement is effective, along with your first monthly retirement benefit payment. For example, if your retirement date2 is May 1, your BackDROP payments will be made on the last working day of May. This is assuming you have completed all necessary forms, including your BackDROP Distribution3 form, when you retire online or on paper.

     For more information, see the BackDROP brochure available on our website.

    1BackDROP is an option that allows eligible members to receive a lump-sum payment in addition to an ongoing monthly payment. It 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. 

    2Your “retirement date” is defined as the first day of the month in which you begin receiving your MOSERS pension payments. Your “termination date” is last day of employment as a MOSERS benefit-eligible employee, as reported by your employing department. “Termination date” is usually the day people have cake, carry out their stuff, and say goodbye to their co-workers. Your termination date must be at least one day before your retirement date. Members often confuse these terms but they have very specific meanings when it comes to paying your benefits. 
    3 Note: If you choose to roll over any portion of your BackDROP distribution to an account other than with MO Deferred Comp, the BackDROP Distribution form must be signed by an authorized official from your financial institution or employer plan to indicate it is a qualified retirement account that can accept this distribution. This form will be sent to you if you elect a rollover and your BackDROP will not be processed until it is completed and returned to MOSERS. Print Friendly and PDF

    Retiree Premiums

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    Are retiree health insurance premiums withheld and paid before or after payroll taxes are calculated? The reason I ask is I am trying to determine if the premiums are a qualified health insurance premium expense for Missouri taxes (form MO-A).
    Medical premiums are a post-tax deduction for retirees. Federal and state taxes are calculated based on the gross amount paid by MOSERS.

    We have a helpful guide to understanding the 1099-R form on our website. If you have specific questions on medical premiums, you will need to contact your health insurance provider directly. We also suggest you contact your tax professional with questions about your specific situation, since we cannot give tax advice.

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    Friday After Thanksgiving

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    Is the Governor going to give State employees the day after Thanksgiving as a holiday this year?
    We are sure many state employees are wondering this but to-date we have not received any official notice from the Governor’s office and, as the administrator of retirement, life insurance and long-term disability insurance for most state employees, such executive decisions are not within MOSERS’ purview.

    If the Governor does decide to declare November 27th a holiday for state employees, we expect that he will issue an Executive Order like he did in 2014. You can subscribe to the email update list on the Governor’s website:

    For our retirees who may be curious, regardless of the Governor’s decision, retirees will receive their monthly benefit payment from MOSERS on Monday, November 30, 2015.


    Nov. 6, 2015
    State offices will be closed on Friday after Thanksgiving, Gov. Nixon announces
    JEFFERSON CITY – Gov. Jay Nixon today issued an executive order closing state offices on Nov. 27, the day after Thanksgiving.
    The Governor said public safety and other essential services and facilities will continue their normal operations.
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    How to Withold Out-of-state Taxes

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    I am retiring March 1, 2015 and I will be moving to Indiana. I realize I do not have to pay State taxes in Missouri on my benefits. However, I have been told that Indiana's tax on my retirement benefits will be 4.44%, what, if anything do I need to do about that. And is there anything I need to do before my actual retirement date March 1 2015?
    For your retirement benefit payment, MOSERS will not withhold taxes for any state other than Missouri. We recommend you contact the appropriate state and local tax authorities to determine the taxability of your MOSERS benefit.

    We would suggest that you specify your tax withholding preferences by completing a Substitute W4-P (Tax Withholding for MOSERS Benefit Payments) form when you retire, which you can do by logging into your secure Member Homepage on MOSERS’ website.

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    Legislator vs. General Employee Pay Increases

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    I'm really interested in getting some historical context on Missouri State Employee pay and retirement, in relation to the Legislature. I know Legislators get frequent pay raises because they tied their pay to judges, and I know they have a sweet deal on retirement, but could you provide a side-by-side comparison as to how much average state worker pay has gone up since 2000 vs Legislator pay in the same period? Could you provide a similar comparison to how much Legislators get compared to average state workers and how they qualify (i.e., how much work for how many years, and what benefit it generates)? Thanks.
    We consulted the Office of Administration for state employee pay information and created this table to answer your question:
    Comparison of Salary Increases
    Fiscal Year
    Legislators’ Salary
    State Employees’ Salary*
    July 2000
    $50/month increase and a one-step increase; 1/2001: $35/month increase
    July 2001
    No increase
    July 2002
    No increase
    July 2003
    No increase
    $600/year increase for employees making less than $40,000 per year
    July 2004
    No increase
    $1,200/year increase
    July 2005
    No increase
    No increase
    July 2006
    No increase
    4% increase
    July 2007
    No increase
    3% increase
    July 2008
    No increase
    3% increase
    July 2009
    No increase
    July 2010
    No increase
    No increase
    July 2011
    No increase
    No increase
    July 2012
    No increase
    2% increase for employees making less than $70,000 per year
    July 2013
    No increase
    No increase
    January 2014
    No increase
    1/2014: -$500/year increase
    *Note: this table only includes general increases for state employees.  This information does not include job class-specific increases that have been approved during that time or discretionary increases that agencies may have given to employees during this time period.  Some examples of discretionary increases include merit increases, equity increases, additional duty increases, etc.  The information also does not include things like end of probation increases.

    Legislator’s salaries are not tied to the pay of judges.  You can view the 2001-2014 Schedules of Compensation for judges of the Missouri Supreme Court, the Court of Appeals and the Circuit Courts on the Missouri General Assembly’s website in Appendix D.

    As for retirement, you can view comparison charts of general employees’ and legislators’ retirement benefits on MOSERS’ website. It is important to note that a side-by-side comparison of the two groups is difficult, because legislators have term limits, and thus their vesting requirements, base benefit formula and some other provisions must be different. Legislators also are not eligible for the BackDROP.

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    Explanation of BackDROP and Payment Options

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    I just spoke to a retiree. She told me that your backdrop actually comes off the end of your retirement payments. In other words do we get less number of monthly payments? Please explain how that works. Also,she stated we have to have taxes taken out if we get more than 2 years back drop. Is that true? I plan on retiring in less than 3 years so would like lots of time to decide how to handle that money. Thank you for your time and help.
    Whether or not you choose to take the BackDROP does not impact the number of monthly benefit payments you receive. Once you retire as a vested member of MOSERS, you will receive a monthly retirement benefit for the rest of your life. If you elect the BackDROP, the monthly benefit payable on your actual retirement date is based on the benefit you would have been receiving had you left employment and retired on an earlier date, referred to as the BackDROP date. In addition, you will receive a lump sum payment equal to 90% of the Life Income Annuity amount you would have received during the BackDROP period.

    If you elect the BackDROP, you may receive your BackDROP lump sum distribution in one of three ways, all of which have some tax implications. If you receive the payment before age 59 1/2, you may have to pay an additional 10% premature distribution tax (see Special Tax Notice for exceptions).

    Cash option – If you elect the cash option, the distribution will be paid directly to you. MOSERS is required to withhold 20% in federal tax withholding. The BackDROP distribution is considered taxable income for the year in which you receive the payment if you choose the cash option.

    Rollover Option – If you elect the rollover option, your payment will be made directly to an individual retirement account (IRA), or if you choose, to another eligible employer plan [i.e. State of Missouri Deferred Compensation Plan, 403(b), 401(k), 401(a), etc.] that will accept your rollover. Your payment will not be taxed in the year of the rollover and no income tax will be withheld, unless it is a rollover to a Roth IRA. Otherwise, the payment will be taxed when you take it out of the traditional IRA or the eligible employer plan.

    Combination Cash and Rollover Option – If you elect this option, you may specify the amount of your distribution to be made directly to an IRA or another eligible retirement plan. The balance will be paid to you (less the required 20% federal income tax withholding).

    You can read more about BackDROP on our website. As always, we encourage you to meet with a Benefit Counselor to discuss your individual circumstances as you get closer to retirement.

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    BackDROP and the Ongoing Monthly Benefit

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    Just want to make sure of something because of one of the Pension Plus articles and the way it was written. (Yes, someone actually reads them!)  
    When I do retire I will received the BackDrop money (regardless of what I choose to do with it and those options) AND my monthly retire retirement benefit (regardless of which option I choose). Correct? In other words, the BackDrop is an additional payment to my regular monthly income. Correct? Thanks for the clarification.
    Thank you for reading our newsletter. We appreciate it! 
    To answer your question, yes, if you elect to take a BackDROP amount, you will still receive an ongoing monthly benefit. If you elect the BackDROP, the monthly benefit payable on your actual retirement date is based on the benefit you would have been receiving had you left employment and retired on an earlier date, referred to as the BackDROP date. In addition, you will receive a lump sum payment equal to 90% of the Life Income Annuity amount you would have received during the BackDROP period. See our website to read more about BackDROP.
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    Financial condition of plan

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    Is MOSERS currently under-funded? Are the current obligations greater than the resources available? Does this threaten the payment of future benefits?
    The most important message for MOSERS members is that promised benefits are secure. According to the June 30, 2009, report from the System’s actuary, MOSERS has a funding ratio of 83%, based on the actuarial value of assets. The board, as required by law, certified the actuarially determined contribution rate that is necessary to cover the current liabilities of the plan administered by the system and move the system toward 100% funding over a period of future years.
    The September 17th meeting of the MOSERS Board of Trustees received a certain amount of media coverage. We think that was due to the board’s scheduled vote regarding the state’s contribution rate that the general assembly will be requested to fund in the FY11 budget, which begins July 1, 2010. Each September the board certifies the state’s contribution rate that will become effective the following July. The rate certified this year was 13.81% of payroll for the fiscal year that starts July 1, 2010. That is up 1.06% from our current rate of 12.75%, and translates to an increase of approximately $20 million. While it is normal for the contribution rate to fluctuate from year to year, this was a larger change than would normally be expected but then the financial markets over the last year have not behaved as would normally be expected either.
    Perhaps the most important takeaway from the most recent report of the system’s actuary is the conclusion which reads as follows:
    Based on the results of the June 30, 2009 regular annual actuarial valuation, it is our opinion that the Missouri State Employees Retirement System continues to be in sound financial condition in accordance with actuarial principles of level percent-of-payroll financing.Given the recent tumultuous economic conditions and concerns about the effect on the state budget, we expect that there will continue to be news reports, as well as rumors and concerns circulating about the effect of these issues on the retirement system. We encourage you to visit the MOSERS website frequently to stay informed of issues and decisions that impact your retirement system.
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    Credit for unused sick leave

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    I have heard a rumor that the state might do away with applying our unused sick leave to our credible service at retirement. Presently for every 168 hours of unused sick leave, one month is added to our credible service. Is there any truth to this rumor?
     No, at this time no legislation has been introduced to eliminate the use of unused sick leave for retirement purposes. Print Friendly and PDF

    Withholdings from retirement checks

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    Are social security withholdings held from the monthly retirement checks I will receive?
    No, the only withholdings that may apply to your retirement benefit are federal and state income taxes along with state sponsored medical and life insurance premiums.
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    Advance notice required for retirement

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    I was informed today that because I did not give the personnel office here at my institution (SCCC) 30 days notice that I would be retiring on 1 Nov 08 that this could cause a delay in receiving my retirement check at the end of the month. Can you tell me if this is a true statement? If it is, what options do I have? By policy, I am required to give a 10-day notice informing them of my intentions and that was submitted.
    When you will begin receiving a monthly retirement benefit is determined by the following:
    • The date of retirement listed on your Application for Retirement.
    • The timely completion of MOSERS’ 2-step retirement process.
    For a November 1 date of retirement, you must submit your Application for Retirement to MOSERS by September 30 and your Retirement Election Form by October 31.
    Since your personnel office representative was not aware of your intent to retire until the end of October, they may have been concerned that you did not meet the Sept. 30 MOSERS application deadline. As long as the application for retirement and the retirement election form are received before the deadlines, you will receive your benefit payment at the end of November.
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    Will electing BackDROP decrease my monthly benefit?

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    Once again, I’ve heard that if an employee accepts Backdrop Money, it will lower their monthly retirement amount. Is this true?
    P.S. I’ve also heard that the only way it could possibly lower it, is that, Moser’s calculation, using your three highest earning years, stops when Backdrop begins.
     Yes – that is true. When you elect the BackDROP option, you are basically saying you want your retirement benefit to be computed as if you had retired at an earlier date (the BackDROP date). On the BackDROP date, you would have had less service credit than you actually have when you retire, and your final average salary would probably have been lower than if computed at the time of your actual retirement. Your monthly benefit will be equal to what you would have been receiving if you had retired on the BackDROP date (which would include any cost of living adjustments added since that date) and be based on the option you elect when you actually retire.
    In exchange for taking the lower monthly benefit, you will, at retirement, receive a lump sum payment equal to 90% of the total monthly benefits you would have received between your BackDROP date and the date you actually retire (the BackDROP period).
    More information on the BackDROP is available on our website.
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    Explanation of "excess retirement benefit"

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    Please explain and give an example of “excess retirement benefit.” I read the notice of the board approval but did not understand.
    Under Internal Revenue Code section 415, pension plans such as MOSERS must limit the amount of retirement benefits that can be paid to an individual. The annual limit for 2008 is $185,000 (with significant reductions for retirement before age 62).
    Even though it is highly unlikely that a MOSERS retiree would exceed the limit (even with the pre-age 62 reductions), we felt it prudent to establish a means of paying benefits that might otherwise not be allowed under this IRS rule.
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    How to request a benefit estimate

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    How would I find out how much I would get monthly when I retire?
    You may prepare a personalized benefit estimate using our website.

    • Go to
    • Click on Member Login. (If you do not have a password, follow the instructions to Request a Password on our website.)
    • Click on Select a Date Estimate (under Personal Information).
      Follow the instructions to prepare a benefit estimate.
    Or, contact a MOSERS benefit counselor and request a benefit estimate. Print Friendly and PDF

    Amount of retirement benefit per pay period

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    I have just been offered a job with the state of Missouri and am trying to figure out how much retirement benefit I get each pay period. I'm sure it's a percent of my paycheck, but I don't see that percent listed anywhere. What is the percent per pay period for retirement?
    MOSERS is a defined benefit plan and your retirement benefit is funded solely by employer contributions. In order to qualify for a retirement benefit from MOSERS, you must have at least five years of credited service. Your retirement benefit is calculated using a formula that is set by law. The base benefit formula for general state employees hired after June 30, 2000 is:
    Credited Service x .017 x Final Average Pay (3 year average)
    Detailed information regarding retirement benefits may be found in our General Employees’ Retirement Handbook. Print Friendly and PDF

    If a retiree gets fired after being reemployed by the state

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    I was told by another employee that a person had retired, then was re-employed with a state agency, but got fired. Is it true they lost any state retirement benefits? I find it hard to believe, but I didn't know enough to argue the point.
    If a retiree returns to work in a benefit eligible position (a position normally requiring at least 1040 hours of work per year), the retiree will not be eligible to receive any retirement benefits while reemployed. However, the retiree’s retirement benefits will resume once the retiree’s reemployment ends (even under an involuntary termination). The retiree also would receive an additional retirement benefit based on service while reemployed if the retiree was reemployed for at least one year prior to ending employment (again, it does not matter if the termination was involuntary).
    For more information about reemployment after retirement, see Print Friendly and PDF