Showing posts with label final average pay. Show all posts
Showing posts with label final average pay. Show all posts

Pay Raise & Final Average Pay

Posted on
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.

Print Friendly and PDF

State Employee Pay Raise

Posted on
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.

Print Friendly and PDF

Final Average Pay Calculation

Posted on
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.

Print Friendly and PDF

Calculating Final Average Pay

Posted on
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.

Print Friendly and PDF

How is Final Average Pay Calculated?

Posted on
I thought retirement payments were based on last 3 years' salary of employment at the state. I heard over the weekend that retirement payment is actually based on 36 months of your highest paid salary throughout a state employment history. Would appreciate clarification. Thanks.
To calculate your pension benefit, we will use your highest 36 full consecutive months of paywherever 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.

Read below for more information. 

We calculate benefits for general state employees using this formula: 
Final Average Pay (FAP) x Credited Service x Multiplier = Monthly Base Benefit

•         FAP is the average of your highest 36 full consecutive months of gross pay no matter where in your work history that may fall. Practically speaking, for most, it is during their last three years, 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.) 
•         Credited Service is the amount of time (in years & months) that you have worked in a MOSERS benefit-eligible position (added to any 
service credit that you may have purchased or transferred).
•         Multiplier – The multiplier for
MSEP is 1.6% (0.016); for MSEP 2000 & MSEP 2011 it is 1.7% (0.017).


As an example, let’s use the following assumptions:
•         Final Average Pay - $2,600.00     
•         Credited Service - 25 Years 3 Months      
•         MSEP Multiplier - 1.6% (.016)

$2,600.00 x 25.25 x .016 = $1,050.40 in monthly pension benefits from MOSERS

See Which Plan Am I In? to determine if you are a member of the MSEP, MSEP 2000, or MSEP 2011 and to find summaries of benefits, brochures, handbooks, videos and more. Use the Member Login to access your own individual information, see when you are eligible to retire, print a benefit estimate, and retire online when you are Ready to Retire.
Print Friendly and PDF

High 36

Posted on
MY FIVE YEAR BACKDROP PERIOD IS COMPLETE. I KNOW MY RETIREMENT CHECK IS BASED ON MY BEST 36 MONTHS. IF I DO NOT ELECT BACKDROP, CAN I USE MY BEST 36 MONTHS THROUGHOUT MY ENTIRE CAREER, OR ONLY THE PERIOD PRIOR TO MY ORIGINAL BACKDROP DATE?
Yes, 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, which may be in your final years of employment, and will use that in calculating your monthly benefit.

Background for Other Readers: Any pay or service you get during your BackDROP period is not counted when calculating your monthly benefit payment.  If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your MOSERS-covered work history prior to your BackDROP date.

But keep in mind, you are not required to take BackDROP, regardless of how long you work beyond normal retirement eligibility, and you don’t have to notify MOSERS of any decisions about BackDROP until you retire. You may elect not to take BackDROP if you want all your service and pay to count and, likely, increase your monthly benefit.

This graphic may help explain the big picture, or you can read the BackDROP brochure on our website for more information. BackDROP can be complicated to understand, so MOSERS benefit counselors are available to help by phone or in person by appointment. Call (800) 827-1063 to discuss your options. Counselor can also provide you with benefit estimates, with and without the BackDROP included, so you can compare.

Print Friendly and PDF

Final Average Pay & BackDROP

Posted on

Note: the question below refers to a previous Rumor Central question from July 2018:
"As you referenced, FAP is determined using your highest 36 full consecutive months of pay when looking at your entire work history covered under MOSERS. Practically speaking, for most, that is their last three years, but not always. The exception to this would occur under the BackDROP (if eligible). If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your MOSERS-covered work history prior to your BackDROP date. In other words, any pay or service during your BackDROP period doesn’t count toward your monthly benefit payments."
Okay, based off this information, since I am working on my back-drop currently, an increase in pay will NOT increase my retirement? I am planning on working overtime as a Correctional Officer, will this have an effect on the amount of money I receive in my retirement? Yes or No...
You are correct that pay earned during your BackDROP period will not count towards calculating your retirement benefit. Your monthly benefit will be calculated using your final average pay (FAP) and credited service as of your BackDROP date (the day your BackDROP period begins).

Any pay or service you get during your BackDROP period is not counted when calculating your monthly benefit payment. To be clear, any overtime pay you receive during your BackDROP period will not be considered in calculating your final average pay. But keep in mind, you are not required to take BackDROP, regardless of how long you work beyond normal retirement eligibility, and you don’t have to notify MOSERS of any decisions about BackDROP until you retire. You may elect not to take BackDROP if you want all your service and pay to count and, likely, increase your monthly benefit.

This BackDROP graphic may help explain the big picture or you can read the BackDROP brochure on our website for more information. Details related to BackDROP can be confusing! Members who are or may become eligible for BackDROP are encouraged to attend a PreRetirement Planning Seminar and/or make an appointment with a MOSERS benefit counselor for further explanation.

Print Friendly and PDF

Overtime & Final Average Pay (FAP)

Posted on
Given the extreme amount of overtime currently being worked by corrections officers (over 1 million hours so far in 2018, and 1.6 million last year), how will this effect the long term funding available for pensions? Their pension is based off their 3 highest consecutive grossing years of service. Many officers have been grossing 2-3 times their base pay due to the inordinate amount of overtime. This has been ongoing now for two-three years. This will make a huge impact on their pension monthly benefit, increasing it exponentially. Has there been any comprehensive study done on how this will effect our pension funding in the future?
Calculating Your Benefit

You are correct, retirement benefits for general state employees are calculated using a three-part formula:

Final Average Pay (FAP)  x  credited service  x  a multiplier =  Monthly Base Benefit

As you referenced, FAP is determined using your highest 36 full consecutive months of pay when looking at your entire work history covered under MOSERS. Practically speaking, for most, that is their last three years, but not always. The exception to this would occur under the BackDROP (if eligible). If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your MOSERS-covered work history prior to your BackDROP date. In other words, any pay or service during your BackDROP period doesn’t count toward your monthly benefit payments.

Overtime pay can increase your retirement benefits if there is a pattern of overtime pay. We don’t count one-time payments or any payments from your employer after you terminate state employment such as for unused vacation/annual leave.

Pension Funding

With regard to your question about how all this overtime will affect pension funding, you can rest assured that it is all being factored in to our funding process, we have made our external actuary aware of it, and we will continue to monitor it.

In setting funding policy, our Board of Trustees works with our external actuary to review and set assumptions about a variety of economic and demographic factors including payroll growth, inflation, life expectancy, and several other factors.

We conduct an annual “valuation” which is collecting all the above data (and more) and sending it to our external actuary. Our actuary does an “experience study” every 5 years to compare our assumptions to our actual experience with our members and with other economic factors. Then, we make adjustments accordingly. All that (and more) goes into the calculation of employer contribution rates going forward.

The Department of Corrections (DOC) is a large employer but is one of several that we cover. While there may have been increases in payroll at DOC, they are offset elsewhere. For the year ended 6/30/17, the overall pay increase for state employees we cover was slightly less than assumed (p. 20 of FY17 Valuation). We will have the data for FY18 soon. Each of the 39 state departments, agencies, colleges, or universities that we cover makes employer contributions as a percentage of their total actual payroll, which includes overtime pay. So, paying overtime also increases the amount of employer contributions that DOC has already been making to MOSERS. As mentioned above, we will continue to monitor overtime at DOC and factor it into our funding calculations.

Print Friendly and PDF

Final Average Pay & Rule of 80

Posted on
Note: we receive this question a lot, so we thought it would be helpful to repost it as a reminder.
Is our retirement benefit based on the 3 highest years of wages?
or the 3 highest years of wages before you hit 80 and out?
I keep hearing both, so not sure which is right.
The answer depends on if you elect BackDROP* (if eligible); not when you hit “80 & Out”.

If you are a general state employee, your retirement benefit is calculated using a three-part formula:

Final Average Pay (FAP)        x            credited service         x             a multiplier

FAP is determined using your highest 36 full consecutive months of pay when looking at your entire work history covered under MOSERS. Practically speaking, for most, that is their last three years, but not always.

The exception to this would occur under the BackDROP (if eligible). If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your MOSERS-covered work history prior to your BackDROP date. (Some people find BackDROP easier to understand if they think of the BackDROP period as being “cashed in” because salary and service during that period don’t count in the calculation of your monthly benefit amount.)

So, to reiterate, if you don’t elect BackDROP, your monthly benefit will be based on your highest 36 full consecutive months of pay, regardless of whether that is before or after you might hit “80 & Out”.  See the MSEP/MSEP 2000 General Employees Retirement Handbook for an example and more detailed information. Also, keep in mind that “80 & Out” is not the only way to become eligible for retirement. For example, as a general state employee in MSEP 2000, you might become eligible for normal retirement at age 62 with 5 years of service before you would become eligible for “80 & Out”.  See Which plan am I in? with a list of plan provisions including criteria for normal retirement eligibility in each plan.

*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.
Print Friendly and PDF

How is Final Average Pay Figured?

Posted on
I'm thinking about retiring when I am 62 years old. I'm confused on which salaries would be used to figure my retirement. Is it the last 3 yrs of work, the 3 highest salaries, or the 3 highest consecutive salaries?
Pay is one part of the three-part formula for general state employees:

Final Average Pay (FAP) x Credited Service x Multiplier = Monthly Base Benefit

Specifically, FAP is the average of your highest 36 full consecutive months of gross pay no matter where in your work history that may fall. Practically speaking, for most, it is during their last three years, 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.) 

*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. 

Print Friendly and PDF

Income Replacement in Retirement

Posted on
I was told that if you work for the state for 40 years that your retirement will be roughly the same as your salary. This doesn't make sense to me but need to check it out.
With forty years of service, your retirement benefit from MOSERS would not be the same as your salary; however, your MOSERS benefit plus your Social Security benefit would be closer to replacing most of your pre-retirement salary. Here is more information:

The retirement plan through MOSERS is a defined-benefit pension. That means the benefit is defined by law and based on a formula as shown here:

Final Average Pay (FAP) x Credited Service x Multiplier (1.6% for MSEP; 1.7% for MSEP 2000/MSEP 2011) = Monthly Base Benefit  

Example: Let’s assume that when you retire, your annual salary is $40,000; you have 40 years of service; and you elect MSEP with a  multiplier of 1.6% (0.016)

FAP ($40,000/12 = $3,333.33 monthly) x Credited Service (40 years) x Multiplier (0.016) = Monthly Base Benefit

$3,333.33 x 40 x 0.016 = $2,133.33

With 40 years of service, your monthly base benefit is equal to 64% of your salary at retirement. This does not include the impact of such provisions as the Temporary Benefit which may apply, if eligible, or COLAs in retirement.

As noted in our publication, Key Facts, generally speaking, combined pension and social security benefits should replace approximately 75% of a 30-year employee’s final average pay. Additional personal savings through programs such as MO Deferred Comp can make up the difference. You can get a pension benefit estimate at any time by logging in to your Member Homepage. Click on Estimates, then on Estimate Your Retirement Benefit. You may wish to print several versions based on different dates or other factors. Or, contact a MOSERS benefit counselor to request estimates or to make an appointment for a face-to-face meeting. We encourage you to explore the section of our website called “What Plan Am I In?” to read more about the specific provisions in each plan. Once you meet the age and service requirements and retire under a MOSERS defined benefit plan, you are guaranteed a lifetime pension benefit. When you are Ready to Retire, we are here to help.


Print Friendly and PDF

BackDROP & Monthly Pension Benefit

Posted on
A question about the backdrop: does it in any way effect your pension? Is your pension reduced? Where does the backdrop money come from?
Yes, if you elect the BackDROP* at retirement, it will likely affect the amount of your monthly pension benefit. With the BackDROP, your monthly benefit will be calculated using your final average pay and creditable service as of the BackDROP date that you choose, rather than as of your actual retirement date. This typically results in a lower monthly payment (compared to what it will be if you do not elect the BackDROP). However, as a tradeoff for a lower monthly payment, you also get a lump-sum payment. The BackDROP is simply a benefit payment option that is available to qualified members.

For additional information, you can: View this BackDROP graphic, read the BackDROP brochure and a variety of Rumor Central questions on the topic, discuss your options with a MOSERS benefit counselor, and use our online Comparison Calculator to see which option might be most advantageous to you over the long-term. This short Comparison Calculator video provides an overview of how the calculator can be helpful in comparing various benefit payment options. MOSERS benefit counselors are available by phone at (800) 827-1063 or you may make an appointment to meet with a counselor in person M-F, 7:30 a.m. - 4:30 p.m., by selecting Option 1 from the main menu.

Regarding your question of where the money comes from for the BackDROP, it all comes from the MOSERS trust fund. In its simplest terms, the BackDROP provides the option to “take more money now and less later” or  “take less money now and more later”. You can see an example of the calculations in the BackDROP brochure. According to our actuaries, it is cost-neutral to the system.

*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.  

Print Friendly and PDF

Final Average Pay (FAP)

Posted on
Is my retirement high three year average based on my base pay or is it based on my gross pay? (gross pay being base pay plus all overtime pay that was cashed out.)
 Your pension benefit uses your gross pay (before taxes, health insurance, cafeteria plan, etc. and may include overtime pay and holiday pay). Pay is one part of the three-part formula for general state employees:

Final Average Pay (FAP) x Credited Service x Multiplier = Monthly Base Benefit

•         FAP is the average of your highest 36 full consecutive months of gross pay no matter where in your work history that may fall. Practically speaking, for most, it is during their last three years, 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.) 
•         Credited Service is the amount of time (in years & months) that you have worked in a MOSERS benefit-eligible position (added to any service credit that you may have purchased or transferred).
•         Multiplier – The multiplier for MSEP is 1.6% (0.016); for MSEP 2000 & MSEP 2011 it is 1.7% (0.017).

As an example, let’s use the following assumptions:
•         Final Average Pay - $2,600.00    
•         Credited Service - 25 Years 3 Months      
•         MSEP 2000 Multiplier - 1.7% (.017)

$2,600.00 x 25.25 x .017 = $1,116.05 in monthly pension benefits from MOSERS

See Which Plan Am I In? to determine if you are a member of the MSEP, MSEP 2000, or MSEP 2011 and to find summaries of benefits, brochures, handbooks, videos and more. Use the Member Login to access your own individual information, see when you are eligible to retire, print a benefit estimate, and retire online when you are Ready to Retire.

Print Friendly and PDF

Final Average Pay

Posted on
Is our retirement benefit based on the 3 highest years of wages?
or the 3 highest years of wages before you hit 80 and out?
I keep hearing both, so not sure which is right.
The answer depends on if you elect BackDROP (if eligible); not when you hit “80 & Out”. 

If you are a general state employee, your retirement benefit is calculated using a three-part formula:

Final Average Pay (FAP)        x            credited service         x             a multiplier

FAP is determined using your highest 36 full consecutive months of pay when looking at your entire work history covered under MOSERS. Practically speaking, for most, that is their last three years, but not always.

The exception to this would occur under the BackDROP (if eligible). If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your MOSERS-covered work history prior to your BackDROP date. (Some people find BackDROP easier to understand if they think of the BackDROP period as being “cashed in” because salary and service during that period don’t count in the calculation of your monthly benefit amount.)

So, to reiterate, if you don’t elect BackDROP, your monthly benefit will be based on your highest 36 full consecutive months of pay, regardless of whether that is before or after you might hit “80 & Out”.  See page 20 of the MSEP/MSEP 2000 General Employees Retirement Handbook for an example and more detailed information. Also, keep in mind that “80 & Out” is not the only way to become eligible for retirement. For example, as a general state employee in MSEP 2000, you might become eligible for normal retirement at age 62 with 5 years of service before you would become eligible for “80 & Out”.  See Which plan am I in? with a list of plan provisions including criteria for normal retirement eligibility in each plan. 

Print Friendly and PDF

Cafeteria Plan & Final Average Pay

Posted on
I will be retiring in 3 years (1-1-19). I usually participate in the Cafeteria Plan at $2400/yr. By doing this does it decrease my monthly retirement and if so by about how much? I'm trying to figure out if the Cafeteria savings is worth the change in benefits.
No. Participation in the cafeteria plan does not decrease your MOSERS benefit. Your MOSERS benefit is calculated using the following formula:

Final Average Pay x Credited Service x Multiplier = Monthly Benefit Payment

Your question pertains to final average pay (FAP). FAP is arrived at by finding the average of your highest 36 full consecutive months of pay. We use your GROSS pay, that is, before taxes, health insurance, cafeteria plan, etc., so contributions to the cafeteria plan do not reduce your MOSERS benefit. You may wish to contact the Social Security Administration and find out from them if cafeteria plan contributions may impact your future Social Security benefit.  Print Friendly and PDF

What Does Final Average Pay Mean?

Posted on
When determining your pension amount that you receive once you retire is it based off the last three years of wages you receive or the highest wages you received for the past five years?
If you are a general state employee, your retirement benefit is calculated using a three-part formula:

Final Average Pay (FAP)        x         a multiplier      x          credited service. 

FAP is determined using your highest 36 full consecutive months of pay over your entire work history covered under MOSERS. Practically speaking, for most, that is their last three years, but not always.

The only exception to this would occur under the BackDROP (if eligible). If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your work history prior to your BackDROP date.

Print Friendly and PDF

Final Average Pay

Posted on
I have seen several times on Rumor Central a reference to "final average pay" as part of the retirement benefit calculation. The word "final" makes me think the calculation is based on one's last years of employment prior to retirement, but I thought I saw elsewhere that the calculation is based on one's highest three years of salary, no matter when they occurred. Please clarify; thanks.
Final Average Pay, or FAP, consists of your highest 36 full consecutive months of pay, no matter where in your pay history that may happen to fall. (Practically speaking, for most, that is their last three years but not always.) The only exception to this would occur under the BackDROP. If you become eligible for and elect the BackDROP upon retirement, your highest 36 consecutive months would be determined from your work history preceding your BackDROP date. In other words, if you elect BackDROP, your pay during that period would not be used in calculating your monthly benefit.

Print Friendly and PDF

What is BackDROP Based On?

Posted on
Is it true that the Backdrop amount is based on my highest three consecutive years of earnings?
Not necessarily. The retirement benefit formula takes into account your total service and final average pay (FAP). FAP consists of your highest consecutive 36 months of pay, no matter where in your pay history that may happen to fall. However, if you elect BackDROP (where eligible). the FAP is calculated as of your BackDROP date.

For more information regarding BackDROP, please view our BackDROP for General State Employees Brochure, which can be found at our website at the following link: https://www.mosers.org/Members/BackDROP.aspx

Print Friendly and PDF

Retirement Benefit as Income Replacement

Posted on
Thank you for all your answers to our questions: My feeling of why the State of Missouri's retirement fund is NOT in trouble as other states are is that the state is not only the lowest paying/compensating state but also one of lowest in benefits that includes the retirements. Compared to other states well...wow wonder how we will make it in retirement. Thank you. 
We are always happy to answer questions and respond to our members. You are correct. The Missouri State Employees’ Retirement System (MOSERS) is NOT in trouble. The defined benefit (DB) plan administered by MOSERS was designed so that a 30-year career employee could expect a benefit of about 75% of salary from MOSERS and Social Security. Social Security and personal savings are necessary to achieve the target of 75% of salary.  MOSERS retirees receive a retirement benefit based on a formula which uses the member’s final average pay, years of service and a multiplier. This provides a modest, yet reasonable, benefit payout for our retirees.

Print Friendly and PDF

Deferred Compensation and FAP

Posted on
I contribute from my monthly paycheck to the Missouri Deferred Comp Plan (ICMA-RC) with pre-tax dollars. If I ceased those contributions for my final 36 months of state employment, thereby bumping up my monthly paycheck by that contribution, would that increase my MOSERS contribution? - since my paycheck would increase. 
No, ceasing your contributions to your Deferred Compensation account would not increase your MOSERS benefit at retirement. Final Average Pay (FAP) is one factor in the calculation of your base benefit. FAP is the average of your highest 36 consecutive months of gross compensation. This has nothing to do with what you choose to have taken out of your paycheck as a contribution into your Deferred Compensation account.
The State of Missouri Deferred Compensation Plan offers two catch-up provisions that allow participants to save beyond the maximum annual deferral limits established by the IRS. While you cannot use these provisions concurrently, they allow employees who are thinking about or nearing retirement to save additional funds for their retirement years. For more information, visit the Catch-up Provisions page on the State of Missouri Deferred Compensation Plan’s website.

Print Friendly and PDF