Showing posts with label multiplier. Show all posts
Showing posts with label multiplier. Show all posts

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

Going Back to Work to Become Vested

Posted on
I had 4 years and 7 months in the MOSERS retirement system before changing employment and as I'm now approaching retirement age, would like to go back and pick up one more year of MOSERS eligibility to become vested.

Can you provide me with a list of Employers near Springfield Missouri that have MOSERS retirement?

How would I go about estimating what my potential benefit would be after working 12 consecutive months to become vested to see if it's even worth it.

You are correct in your understanding of the requirement to become vested. Since you left state employment with less than 5 years of service, you forfeited your accrued service credit and all rights to benefits from the MOSERS. If you return to work in a MOSERS-covered position, your forfeited service will be restored and combined with your new service after you have completed 12 continuous months of employment. You can find a list on our website of state agencies who employee workers in MOSERS-benefit eligible positions.

The amount of your potential MOSERS benefit will be determined by this formula: Final Average Pay x Credited Service x Multiplier = Monthly Base Benefit
Let’s assume:
•    Your final average pay is $3,250 per month (an approximate average of state employees)
•    You end up with 6 years of credited service
•    You are in the MSEP 2000 and the multiplier is 1.7%

The formula would be $3,250 x 6 x 0.17 = $331.50 per month. This would be a lifetime monthly benefit for you.

Keep in mind that your benefit will be based on your actual data and could be higher or lower.  Working longer would increase your benefit. You can request an individualized benefit estimate from a MOSERS benefit counselor, and in most circumstances by logging in to your MOSERS Member Homepage through our website.


Print Friendly and PDF

Moody's Ratings

Posted on
As a prospective state employee, I am curious on how any municipal ratings changes by Moody's will affect payout on MO Pensions.
Moody’s ratings do not affect the amount of MOSERS pensions payments. As a new state employee, you would receive a Statewide Employee Benefit Enrollment System (SEBES) brochure with an overview of benefits, including those offered by MOSERS. Along with other benefits, we administer a defined-benefit (DB) pension plan with payments based on a formula as shown below. (The multiplier is determined by your plan; 1.6% for MSEP; 1.7% for MSEP 2000/MSEP 2011). 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.

Pension formula for general state employees: 

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

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

Pension Funding

Posted on
If the MOSERS retirement fund is only 69.6% funded currently and that figure does not go up or only goes up a little by the time I am eligible to retire in 5 years then does that mean I will only get
69.6 % of what I am supposed to get on my monthly pension?
No. MOSERS pays 100% of the promised benefits due to members. The funded status (technically the unfunded actuarial accrued liability or UAAL) of the retirement system is separate from the formula that is used to calculate your MOSERS retirement benefit. We are not a “pay-as-you-go” system, rather we are pre-funded through contributions from the state, contributions from members who were first employed on or after January 1, 2011, and from investment earnings. The funded status refers to the value of assets we have currently relative to all present and future liabilities.

MOSERS provides 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 = Monthly Base Benefit

The multiplier is determined by your plan (1.6% for MSEP; 1.7% for MSEP 2000/MSEP 2011). 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.

We have answered many Rumor Central questions on system funding recently that you may also find helpful.

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

Multipliers for Each Plan

Posted on
What are the percents of pay for years of service? 
The formula used to determine a person’s retirement benefit
  • The multiplier for MSEP 2000 and MSEP 2011 is 1.7%.
  • The multiplier for MSEP is 1.6%.
We encourage you to explore the section of our website called “What Plan Am I In?” to read more about the provisions in each plan. Additionally, any of our benefit counselors are available during our regular business hours to discuss your individual circumstances.

Print Friendly and PDF

Mulitpliers

Posted on
What is the current retirement multiplier? Has anything been introduced in the legislature to increase/decrease?
The retirement multiplier for each of MOSERS’ three plans are as follows:
MSEP – 1.6%. This has been in effect since 1995.
MSEP2000 – 1.7%. This has been in effect since that plan’s inception on July 1, 2000. The multiplier for the temporary benefit available to those retiring under the "Rule of 80" in MSEP2000 is .8% (.008) and is designed to provide supplemental income until age 62.
MSEP2011 – 1.7%. This has been in effect since that plan’s inception on January 1, 2011.
There has been no legislation introduced to change the multipliers of any plan.

Print Friendly and PDF