Showing posts with label high 36. Show all posts
Showing posts with label high 36. Show all posts

Calculating Final Average Pay

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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.

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Final Average Pay and BackDROP Period

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MY PENSION IS BASED ON MY BEST 36 MONTHS EARNINGS. WAGES DURING MY 5 YEAR BACKDROP PERIOD ARE EXCLUDED. WHAT IF MY BEST 36 MONTHS ARE AFTER I COMPLETE MY 5 YEAR BACKDROP PERIOD?

Any pay earned after your BackDROP date (the beginning of your BackDROP period) does not count - it is excluded when we calculate your monthly retirement benefit. We will look at your entire pay history in your MOSERS-covered employment prior to your BackDROP period to find your highest 36 consecutive months of pay and use that to calculate your monthly benefit.

Remember, your BackDROP period, whether it is a 2-year or 5-year period, will always be immediately prior to your retirement date. That means, you wouldn’t continue to be employed in a MOSERS benefit-eligible position after your BackDROP period.

This is one of the factors to consider when making your elections about BackDROP. You can contact a MOSERS benefit counselor who can assist you in evaluating your options. You can also get benefit estimates based on different scenarios and use our Comparison Calculator to compare the long-term impact of different options. (Watch our Comparison Calculator video and our Creating a Benefit Estimate video for help getting started.)

For more information, see our recent post on Final Average Pay and on the 3-part formula we use to calculate retirement benefits.

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High 36

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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.

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Final Average Pay & BackDROP

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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.

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How is Final Average Pay Figured?

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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. 

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Final Average Pay (FAP)

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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.

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Does Cafeteria Plan Affect Monthly Benefit Amount?

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An employee returned from an MCHCP Open Enrollment meeting on 10-9-08. From this meeting, the employee understood that if you plan to retire within the next 3 years, you should drop out of the Missouri State Cafeteria Plan. Because the W-2 (block 1) would show total wages, tips, and other compensation less the premiums or flex amounts, the salary would not be as high for MOSERS to use in calculating retirement benefits. Is this correct?
For purposes of calculating your MOSERS retirement benefit, that is not correct. When we calculate your retirement benefit, we use the average of your highest 36 consecutive months of gross compensation. Gross compensation is your pay before taxes or any other payroll deductions.
Your MOSERS retirement benefit is not affected by the cafeteria plan, but Social Security wages are. For more information on how your Social Security benefit may be affected by the cafeteria plan as you are nearing retirement, please contact ASIFlex, the cafeteria plan administrator, at 800-659-3035 or asi@asiflex.com. Print Friendly and PDF

I am approaching 3 years until my retirement date. When should I plan to attend a meeting concerning my retirement? Do paid overtime hours count towar

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I am approaching 3 years until my retirement date. When should I plan to attend a meeting concerning my retirement? Do paid overtime hours count towards the high 36 months?
We recommend our PreRetirement Planning seminar for members who are within 5 years of retirement. The 2008 brochure and schedule were recently mailed to all members who are within 5 years of normal retirement eligibility.
This full-day seminar is loaded with valuable information that will help you through the retirement process. Representatives from MOSERS, the Missouri Consolidated Health Care Plan, Social Security, and CitiStreet will make presentations and answer your questions.

Regarding your specific question about overtime, compensation consists of all salary and wages payable out of any state, federal, trust, or other funds to an employee for personal services performed for a department (provided retirement contributions were received by us). This excludes any nonrecurring single sum payments or amounts paid after the employee’s termination of employment. Overtime pay will be considered when calculating your highest 36 consecutive months of pay. Print Friendly and PDF

If an individual, at the time of retirement, has accumulated unused vacation time, it is my understanding that that employee is reimbursed for that t

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If an individual, at the time of retirement, has accumulated unused vacation time, it is my understanding that that employee is reimbursed for that time. How, if at all, does the reimbursement for such time factor into the retirement benefits formula determination of the average of highest 36 months of pay? That is, for example, if the final month of pay included payment for two months of unused vacation time, would that be used in the averaging of the 36 months? In this scenario, Employee X could have 35 months of paychecks that were $1000 and a 36th month pay of $3000 (i.e., pay for the 36th month + pay for 2 months of unused vacation). If the unused vacation time payment in the last month were considered, the average pay over that period would be $1055 ($38,000 divided by 36) instead of $1000 ($36,000 divided by 36). Or is any pay for unused vacation time separate from this calculation? Thank you.
By law, your unused vacation pay is not considered in calculating your MOSERS retirement benefit. Print Friendly and PDF

Is retirement income based upon the 3 highest salary years or the final 3 years, assuming 80 and out, as to amount of monthly draw? Thank you.

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Is retirement income based upon the 3 highest salary years or the final 3 years, assuming 80 and out, as to amount of monthly draw? Thank you.
MOSERS members’ retirement benefit is based on the average of the highest consecutive 36 months of salary, wherever it may fall during your MOSERS covered service. If a member is eligible for and elects the BackDROP option, it will be based on the average of the highest consecutive 36 months of salary prior to the BackDROP date. Print Friendly and PDF

Hello, I enjoy your Rumor Central, it is done in a very professional way. My question is: I can retire under 80 and out

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Hello, I enjoy your Rumor Central, it is done in a very professional way. My question is: I can retire under 80 and out in 6 years at age 51. If I keep working past that point and my salary should increase greatly for the following 3 years, will my retirement be based on the highest 3 years prior to reaching 80 and out or will it be based on my highest 3 year salary in my entire work period with the state? Thank you.
Your retirement benefit is based on your highest 36 consecutive months of pay over your entire work history covered under MOSERS. The only exception to this would occur under the BackDROP. If a person becomes eligible for and elects the BackDROP upon retirement, their highest 36 months would be determined from their work history preceding their BackDROP date. Print Friendly and PDF