Showing posts with label legislation. Show all posts
Showing posts with label legislation. Show all posts

Pension Buyout?

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Will there be another pension buyout?
There are no plans in place at this time to offer another buyout option. The Missouri Legislature authorized the MOSERS Board of Trustees to offer the recent Buyout Program under SB 62 but that authorization expired on May 31, 2018. This was a one-time program. If MOSERS were to offer another buyout program in the future, it would require legislative approval. If such legislation passed, we would notify all eligible members. Print Friendly and PDF

College & University MOSERS Members

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I work at a university. The president of the University recently said that MOSER's is trying to kick university employees out of the system. What will happen to our pensions if we are kicked out?
We are not pursuing any efforts to remove university members from MOSERS. Ultimately, if there were any proposed changes to any retirement plan provisions for our members, they would have to go through the legislative process, be passed by the Missouri General Assembly, and be signed into law by the Governor. The 2019 legislative session begins January 9, 2019 and ends on May 17, 2019. You can track all proposed legislation relating to MOSERS on our Legislation page or on the Joint Committee on Public Employee Retirement website. Print Friendly and PDF

Merit System & Reemployment

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Since the Merit system has been removed (by the newly signed law), does this mean that someone who retired from a Merit job could go back to work for the State and still collect their pension?
No. SB 1007, which had the “merit system” language does not contain any changes to any MOSERS benefit provisions. SB 1007 modifies and repeals several provisions relating to the State Personnel Law (SPL), commonly referred to as the Merit system.

As a general state employee, your MOSERS retirement benefit will stop if you retire (or are already retired) and later return to work in a benefit-eligible position covered by MOSERS or MPERS (the MoDot & Patrol Employees’ Retirement System).

Your employer determines if the position is benefit-eligible. MOSERS administers pension benefits for most state agencies and regional state universities. See our website for a complete list of employers covered by MOSERS. If you have a question about whether or not accepting a position with the state will affect your MOSERS retirement benefit, we advise you to check with your potential employer.

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Merit System Bill

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How does, if at all, the removal of the Merit program affect my retirement?
SB 1007 does not contain any changes to any MOSERS benefit provisions so it should have no impact on your retirement. It modifies and repeals several provisions relating to the State Personnel Law (SPL), commonly referred to as the Merit system. It is our understanding that it was signed into law today.

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Senate Bill 1007

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How would Senate Bill 1007 impact state merit employees who are eligible for retirement (past 80 and out)but have not yet retired? 
 SB 1007 does not currently contain any changes to any MOSERS benefit provisions. It modifies and repeals several provisions relating to the State Personnel Law (SPL), commonly referred to as the merit system. In order for those proposed changes to go into effect, the House must also pass the legislation and the Governor must approve it.

We will monitor any legislation affecting MOSERS and inform our members of any changes that become law. The 2018 legislative session ends on May 18th. You can visit our legislative webpage for more information.

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MOSERS' Appropriations

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Now that the House has passed and sent to the Senate HB 2005, could you tell me whether the amounts appropriated for MOSERS ($417,959,249) include all of the amount requested by the MOSERS Board and, if not, what percentage of the request it does include.
Also, could you tell me whether the amount appropriated for MCHCP ($499,756,307) includes the amount requested by MCHCP to subsidize retired state employees' secondary insurance premiums as has been the case in past years?
Yes, the amount appropriated by the House Appropriations subcommittee in HB 2005 fully funds the employer contribution rate as certified by the MOSERS Board. HB 2005 has now been sent to the Senate and must be passed in the Senate and then signed by the Governor. Changes could still be made. We will monitor all bills related to retirement benefits and let our members know about changes, if any, that may affect them.

The House Appropriations subcommittee included $449,656,307 as the state’s contribution to MCHCP. Since health care is a benefit that we do not administer at MOSERS, we are not in a position to comment about whether or not it was the amount requested by MCHCP. Please contact MCHCP directly at (800) 487-0771 or www.mchcp.org for more information. 

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Buyout Program

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Will Mosers be offering another buyout option in the future, like in 5-10 years? What's the projection for that, if so. I had not been vested long and I didn't feel comfortable considering that option given in 2017 but it did make me curious as to how often that option occurs. Please advise.
We are not aware of any efforts to offer another buyout option. The Missouri Legislature authorized the MOSERS Board of Trustees to offer the recent Buyout Program under SB 62 with that authorization expiring May 31, 2018. This was a one-time program. If MOSERS were to offer another buyout program in the future, it would require legislative approval.

For the members who did not elect the buyout option, we will contact you when you are within 120 days of early (reduced) retirement eligibility with information on the retirement application process. If you don’t elect early retirement, we will contact you again 120 days prior to when you are first eligible for normal (unreduced) retirement benefits from MOSERS.

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Missouri Merit System

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I have heard that the merit system might be in jeopardy. For the merit system was ended, would that impact employee's retirement that are eligible for retirement but have not yet retired?
Until we know if or how the merit system may be changed, MOSERS cannot say how your retirement benefits may be affected, if at all.

Any changes to any retirement provisions must go through the legislative process and be signed into law by the Governor.  We will monitor all legislation affecting MOSERS and inform our members of any changes that become law. The 2018 legislative session ends on May 18th. You can follow our legislative webpage for more information.

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MSEP 2011 Retirement Eligibility

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I know that the 10 years vested has been reversed back to 5 years, however I'm inquiring where the process is with going back to 80 & out vs. 90 & out. Is this still on the table?
We are not aware of any plans to change retirement eligibility requirements.

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.

Members of MSEP 2011* will become eligible for normal retirement when they reach age 67 and have at least 5 years of service OR under the “Rule of 90,” which is when they are at least age 55 and their age and service equals 90 prior to leaving state employment.

The 2018 legislative session began January 3 and will end on May 18th. We do not know what might happen with individual bills during the legislative session, but we will monitor all legislation impacting MOSERS and inform our members of any changes that become law.

*Members of MSEP 2011 are those who were first employed in a MOSERS benefit-eligible position on or after January 1, 2011. 

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Losing BackDROP?

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I've hear a rumor that MOSERS employees are telling people that we need to retire soon because we will probably be losing our backdrop money. 
Any changes to BackDROP, or any retirement provision, must go through the legislative process and be signed into law by the Governor.

It is possible that someone misunderstood information from a MOSERS employee. If you elect the BackDROP* at retirement, it will likely reduce your monthly pension benefit amount because you are electing to take part of your benefit as a lump-sum and part of your benefit as a lifetime monthly payment rather than all of it as a monthly benefit.

Another possible scenario that someone may have misunderstood has to do with the timing of one’s BackDROP period relative to when they otherwise would have been eligible for the Temporary Benefit. The Temporary Benefit is available to members eligible to retire under the MSEP 2000 through the Rule of 80. It is payable, in addition to the base benefit, until age 62. The BackDROP lump sum is calculated based on 90% of what you would have received in retirement benefits had you been retired during the BackDROP period. The maximum BackDROP period is 5 years. If someone had been eligible for the Temporary Benefit but worked until age 67 or older, the amount of the lump-sum payment might decrease.

The BackDROP is simply a benefit payment option that is available to eligible members. 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.

*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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System Funding

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We have received some questions about MOSERS' funding related to the Buyout Program: 
I just read an article in the St Joseph News Press that states the Missouri pension system " is struggling " It then talks of the pension buyout program. Financially is the system struggling?
I saw in the editorials from the Kansas City and St Louis newspaper that MOSERS is funded only at 69%. What does this mean for the long term future of MOSERS
 As of June 30, 2016 (the close of the most recent fiscal year), MOSERS is 69.6% funded. That means that we have 69.6% of assets necessary to pay all accrued liability over the long term. Because we operate on a very long-term horizon (already analyzing and anticipating funding needs 30-50 years into the future). We will send a summary annual financial report for fiscal year 2017 to all members in December.

The MOSERS board has taken several actions to keep the retirement system solid and secure into the future. The board approved a proposal to reduce the system’s long-term liability by offering a voluntary lump-sum payment (rather than a monthly pension) to former state employees who will be eligible for a pension benefit at some point in the future. This is the Buyout Program the articles are referring to.

Also, unlike in other states, the Missouri General Assembly has consistently appropriated the full employer contribution to MOSERS as recommended by the plan’s actuary. The Governor signed House Bill 5 on June 30, 2017, which resulted in full funding of MOSERS at the contribution rate as certified by MOSERS Board of Trustees in September 2016.

You can find more information on Rumor Central about other related Board decisions and MOSERS' appropriation as well as additional details regarding MOSERS' funded status.


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Buyout Program

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Concerned about the retirement buyout coming up. I don't understand how its figured out, will they take in consideration how many years you will be actually in retirement, help with taxes if you cash out, financial advice. Also, when can we expect more of the information to come out. Thank you!
We are currently finalizing the list of members who are eligible for the Buyout Program and verifying all their information. We cannot yet answer any questions about eligibility or individual lump-sum amounts until we have mailed your letter. We will send letters about the Buyout Program to all eligible members by the end of September. This voluntary program will be offered to eligible former state employees who are vested in a MOSERS retirement plan.

Not Eligible: You are not eligible for the buyout if you are actively employed in a MOSERS or MPERS-covered position, already retired and receiving a MOSERS benefit, have applied for early retirement or will reach normal retirement eligibility with MOSERS prior to 12/1/2017. (See our Rumor Central post “Lump-Sum Payout?” for other reasons vested former state employees may not be eligible.)

If you are eligible, we will send you a personalized letter which will contain both the estimate of your one-time lump-sum amount (if you choose to elect the buyout) and also your future estimated normal retirement annuity/monthly benefit amount. If you do not choose to participate in the Buyout Program, we will contact you prior to retirement eligibility and provide information about the retirement application process.

The amount of the lump-sum payment will be 60% of the present value of your future normal retirement annuity. In order to estimate how long a member might live in retirement, we will use unisex mortality tables. The discount rate used to calculate the present value of your future normal retirement annuity is 7.50% (this is the amount we assume we will earn each year through our investments). All lump-sum payment amounts will be calculated as of October 1, 2017.

With regard to taxes,

If eligible, you should read the Special Tax Notice and consider discussing it with a qualified tax advisor to ensure you fully understand the tax implications of electing the buyout payment.
If eligible, you may take the lump-sum buyout payment as a cash payment, as a rollover to a qualified retirement plan, or as a combination cash and rollover distribution.
Any distribution not directly rolled over to a qualified retirement plan will be reported as taxable income in the year of payment. MOSERS is required to withhold 20% of the taxable portion of a cash distribution for federal income tax. If you are younger than age 59 1/2, an additional 10% early distribution federal tax penalty may apply.

To give members a heads-up so they will be watching for their letter, we will send a newsletter (by email and to home mailing addresses that we have on file) to eligible members with more information about the Buyout Program.

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Lump-Sum Payout?

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I have heard rumors of letters going out in September offering current retires a lump sum pay out on their retirement. Is this true?
No. Members who are already retired are not eligible for the Buyout Program. The Buyout Program is voluntary and allows vested former state employees (who meet all eligibility requirements) to elect to cash out their future monthly retirement benefit in exchange for a lump-sum payment now. We will mail a letter and application to eligible members during the month of September.

You are NOT eligible to participate in the Buyout Program if:

You have been employed by the State of Missouri at any time after June 30, 2017 in any position covered by MOSERS or MPERS.
You would have reached normal retirement age and are eligible to receive a normal retirement annuity from MOSERS before December 1, 2017 (this includes all current retirees).
You have applied for or you are receiving early retirement benefits from MOSERS.
You are a member of the Missouri State Employee Plan 2011 and are eligible for a refund of your employee contributions under section 104.1091, RSMo, and the amount of the refund would be greater than the amount of the buyout payment otherwise payable under the Buyout Program.
You left state employment between October 1, 1984 and September 1, 2002 and are eligible for a cash out of your future retirement annuity under section 104.335.6, RSMo.
You are subject to a Division of Benefit Order ("DBO") issued by a court under sections 104.312 or 104.1051, RSMo, during a divorce proceeding.

The Buyout Program was authorized under Senate Bill 62, which was enacted in 2017.

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SB 62 & Changes to MSEP 2011

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I was wondering if we are going to be switching back to 80 and out as well as back drop? I started about 3 years ago and do not have these benefits but was told we are to receive them again.
Other than to reduce the vesting period from 10 years to 5 years, the provisions of SB 62 have NO impact on members of MSEP 2011 who work in a MOSERS benefit-eligible position until they reach normal retirement eligibility.

Members of MSEP 2011 will become eligible for normal retirement when they are age 67 and have 5 years of service OR under the “Rule of 90” which is when they are at least age 55 and their age and service equal 90 when they terminate/leave state employment.

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.

For more information on vesting, see The Change from 10 to 5-Year Vesting for MSEP 2011 Members.

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MSEP COLA

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Did the governor change the 4% cola on the old plan (MSEP)? 
No. The provisions in SB 62 have NO impact on members of MSEP or MSEP 2000. What you may be referring to is one of the “offsets” in SB 62 which contribute to making the MSEP 2011 vesting reduction (from 10 years to 5 years) cost neutral for the state. These offsets apply only to new terminated-vested members of MSEP 2011, effective January 1, 2018—one of these provisions is that the first cost-of-living adjustment (COLA) for such members will be applied on the second anniversary of their retirement (rather than the first anniversary).

The offsets have no impact on current employees, retirees, or members of MSEP 2011 who retire directly from active state employment.

To review information about COLAs for other members, the COLA calculation depends on which plan you are in. If you retired under MSEP and were hired before August 28, 1997 and were vested in MSEP, you will receive a minimum 4% COLA until your accumulated COLAs are equal to 65% of your initial base benefit. This is called your COLA cap. Upon reaching the cap, your COLA will be calculated like other retirees and will range from 0% to 5% each year depending on the increase in the Consumer Price Index.

The 2017 COLA rate for MSEP retirees who have reached their COLA cap, MSEP members who were first hired on or after August 28th, 1997, and members retired under MSEP 2000 is 1.010%.

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MSEP 2011 Members and SB 62

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I was hired July 2013, I will now be vested in 5 years instead of 10. My question is will I still have to contribute 4 percent to my retirement and will I still be 90 and out. thank you.
Yes, you will still have to contribute 4% of pay to your future retirement benefit. It is important to note that the 5-year vesting for MSEP 2011 members will go into effect on 1/1/2018. MSEP 2011 members must be actively employed on or after 1/1/2018 to be covered by this change.

Members of MSEP 2011 will become eligible for normal retirement when they are age 67 and have 5 years of service OR under the “Rule of 90” which is when they are at least age 55 and their age and service equal 90 when they terminate/leave state employment.

For more information on vesting, see The Change from 10 to 5-Year Vesting for MSEP 2011 Members.

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Senate Bill 62 and Sick Leave

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We recently received several similar questions about SB 62:
1. How will SB62 change the way accumulated sick leave is calculated when a person chooses to retire?
 2. I am receiving conflicting information on the recently passed SB 62 and would like clarification.  I am currently employed by the state (hired in 1993) and I intend to participate in MSEP upon retirement.  With the recent passage of SB 62, will I receive service credit for unused sick leave, and, will I receive a COLA on my first anniversary?  It is my understanding that SB 62 provision do not apply to MSEP members but I want to be certain.  Thank you for your clarification.
 3. An article in the St. Louis Post Dispatch says "MOSERS is placing new restrictions on using accumulated unused sick leave in calculating a pension payout." What is the change and when will the new calculations be adjusted?
4. I have a question regarding the new pension law that was just passed, Senate Bill 62. According to the St. Louis Post Dispatch article, there are new restrictions on accumulated sick leave. Exactly what are these restrictions? Does this mean the blocks of sick leave I have accumulated will no longer count toward my retirement formula? The article leaves more questions than answers.
5. What did the Governor just sign re: retirement and unused sick leave and cost of living?

The provisions in SB 62 have NO impact on members of MSEP or MSEP 2000. Additionally, other than to reduce the vesting period from 10 years to 5 years, the provisions of SB 62 have NO impact on members of MSEP 2011 who work in a MOSERS benefit-eligible position until they reach normal retirement eligibility.

Effective January 1, 2018, only members who meet both of the conditions below will NOT have service credit granted for unused sick leave:

• First hired in a benefit-eligible position on or after January 1, 2011 (member of MSEP 2011) and
• Left state employment with a vested retirement benefit but prior to reaching retirement eligibility.

We refer to these members as “terminated-vested” members of MSEP 2011. (Similarly, terminated-vested members of MSEP do not receive service credit for unused sick leave if they left state employment prior to retirement eligibility, either normal or early.)

In contrast, all members of MSEP, MSEP 2000, or MSEP 2011 who retire directly from active employment receive service credit for unused sick leave. Every block of 168 hours of unused sick leave equals one month of service credit. Unused sick leave is used in calculating the amount of the benefit but does not factor into reaching retirement eligibility.

Note: Other “offsets” in SB 62 which contribute to making the vesting reduction cost neutral include the following for terminated-vested members of MSEP 2011 only, effective January 1, 2018:

• Cost-of-living adjustments (COLAs) will be applied on the second anniversary of retirement (rather than the first anniversary).
• If such a member dies prior to retirement eligibility, survivor benefits are not payable until the member would have reached their retirement eligibility age (rather than right away).

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Is SB 62 Retroactive?

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It is my understanding that Governor Greitens signed SB62. Is this bill retroactive or does it start Jan 1, 2018 and go forward? Also, does this bill make all DOC employees 80 and out?
Effective January 1, 2018, the vesting requirement for current and future active members of MSEP 2011 (those member first employed in a MOSERS or MPERS benefit-eligible position on or after January 1, 2011) will be 5 years. It is not retroactive.

Vesting is one part of retirement eligibility. The other part is age. Normal retirement eligibility age requirements are:


MSEP                                                 MSEP 2000                           MSEP 2011
Age 65 with 5 yrs. of service
Age 60 with 15 yrs. of service
“Rule of 80” - at least age 48 with age and service equaling 80 or more

Age 62 with 5 yrs. of service
“Rule of 80” - at least age 48 with age and service equaling 80 or more

Age 67 with 5 yrs. of service (effective 1/1/18)
“Rule of 90” - at least age 55 with age and service equaling 90 or more at time of termination


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Changes to BackDROP?

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I have been told there will be major changes to BACKDROP in the near future. I have 2 1/2 years of backdrop completed, and have planned on completing 5 years.
What, if any, changes are proposed and how will it effect me at this number of years?
The BackDROP is not changing. Any changes to BackDROP, or any retirement provision, must go through the legislative process and be signed into law by the Governor. We have posted a legislative summary of retirement-related bills that passed this session and are awaiting action by the Governor.

BackDROP is an option available at retirement to general state employees in the MSEP and the MSEP 2000 only. If you work at least two years beyond your eligibility for normal retirement, this option provides a way for you to receive a one-time lump-sum payment at retirement in addition to your ongoing monthly benefit. BackDROP is not available to employees hired for the first time in a MOSERS benefit-eligible position on or after January 1, 2011.

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Pension Underfunding

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In light of Illinois' issue with their underfunded pension, how much is Missouri's pension underfunded?
As of June 30, 2016 (the close of the most recent fiscal year), MOSERS is 69.6% funded. That means that we have 69.6% of assets necessary to pay all accrued liability over the long term. Because we operate on a very long-term horizon (already analyzing and anticipating funding needs 30-50 years into the future), our funded status is expected to go down somewhat over the next few years and then begin to go back up. We will send a summary annual financial report for fiscal year 2017 to all members in December.

The MOSERS board has taken several actions to keep the retirement system solid and secure into the future. The board approved a proposal to reduce the system’s long-term liability by offering a voluntary lump-sum payment (rather than a monthly pension) to former state employees who will be eligible for a pension benefit at some point in the future. This is contingent upon the Governor’s action on SB 62. The Governor has until July 14, 2017 to take action on the bill (sign it, veto it, or allow it to become law without his signature). If SB 62 is approved by the Governor, we will contact eligible members.

Also, unlike in Illinois, the Missouri General Assembly has consistently appropriated the full employer contribution to MOSERS as recommended by the plan’s actuary. The FY18 employer contribution contained in HB 5 was no exception and was Truly Agreed to and Finally Passed and sent to Governor Greitens on Thursday May 4th. The Governor has until July 1 to take action on HB 5, which includes MOSERS’ appropriation. You can find more information on Rumor Central about other related Board decisions and MOSERS' appropriation as well as additional details regarding MOSERS' funded status.

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