Please remind employees that before receiving a benefit payment from MOSERS, IRS rules require a “bona fide termination” of the member’s employment. For purposes of MOSERS Board Rules, a "bona fide termination" occurs when:

• The member has completely severed employment;
• The member has not entered into a prearranged agreement (written or oral), prior to retirement, with the State of Missouri or any MOSERS-covered employer for subsequent employment on any basis (full-time, part-time, or other); and
• The member is not subsequently employed with the State of Missouri or any MOSERS-covered employer on any basis (full-time, part-time, or other) within 30 days after their employment with their prior employer has ended.

If a member receives retirement benefits without a bona fide termination, then all further benefit payments will end and the member will be required to repay the System all retirement benefits received, plus applicable interest, based on the assumed rate of return on the date of the member's retirement. Any amounts (including interest) not repaid by the member to the System will be subject to collection from the member's future retirement benefits. In addition, any payment considered to be an in-service distribution may be subject to a 10% early distribution penalty by the IRS.

The member's retirement will be considered null and void. The member can apply for retirement benefits at any time during the member's continued employment but must have a bona fide termination of service and observe the 30-day separation-of-service period to receive retirement benefits.

Upon meeting the termination and reemployment rules, retirees may return to work and continue receiving their monthly pension payment, as long as their position is not a benefit-eligible position.

However, if a retiree returns to work in a benefit-eligible position, their monthly pension benefit stops for any month in which they are actively employed. For example, if a retiree returns to work in a benefit-eligible position on July 27, they will not receive their pension benefit on the last working day of July. In this example, it would have been more advantageous for the retiree to delay their return to work to August 1. Please keep this provision in mind when rehiring retirees. 

A retiree reemployed in a benefit-eligible position will accrue additional service and salary credit if they work continuously for one year. When they retire again, their monthly pension payment will equal the amount they were receiving when they returned to work plus any additional benefit they may have earned during reemployment.

This month, active employees who are within one year of normal retirement eligibility or already eligible to retire will receive a letter reminding them of the termination and reemployment rules. Additionally, we have programmed for an automatic reminder letter to be sent to active employees when they reach the following milestones: one year before early retirement eligibility, two years before normal retirement eligibility, and one year before normal retirement eligibility.

We hope these reminder letters will assist your employees in complying with the termination and reemployment rules, which state that before receiving a benefit payment from MOSERS, IRS rules require a “bona fide termination” of a member’s employment. For purposes of MOSERS Board Rules, a "bona fide termination" occurs when:

• They have completely severed employment;
• They have not entered into a prearranged agreement (written or oral), prior to retirement, with the State of Missouri or any MOSERS-covered employer for subsequent employment on any basis (full-time, part-time, or other); and
• They are not subsequently employed with the State of Missouri or any MOSERS-covered employer on any basis (full-time, part-time, or other) within 30 days after their employment with their prior employer has ended.

For more information, please see our FAQs on Termination and Reemployment Rules and our Termination and Reemployment Rules flyer

Please note that if they do not have a bona fide separation of service, their retirement will be null and void, meaning they will not receive their pension payments.