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  • Contribution Refunds

    Feb 14, 2019, 1:09 PM By MOSERS

    I’m considering accepting a job that participates in Moser. There is a substantial payroll contribution for the pension and that it takes five years to be vested. My question is if I do not work the full five years in order to be vested will my payroll contributions be available to me for withdrawal or transfer?

    Anyone who is first employed in a MOSERS or MPERS benefit-eligible position on or after January 1, 2011 must contribute 4% of pay to the retirement system. Your 4% contribution is used to help pay the cost of your future defined benefit retirement plan and could potentially pay you back far more than you contribute. See a simplified example in The Value of Your Retirement Benefit. When you retire, you will receive a benefit payment every month for as long as you live. This means you can never outlive your MOSERS retirement benefit.

    If you leave state employment prior to becoming eligible for normal retirement, you may request a refund of your employee contributions plus any credited interest. By taking a refund, your forfeit all your credited service. Or, you may leave your contributions with the system if you think you might return to work for the state at some point in the future and would like for those years of service to count toward an eventual retirement benefit. See our Employee Contributions brochure for more information.

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  • Increasing Contributions?

    Aug 20, 2018, 3:46 PM By MOSERS

    Is it possible to contribute more to your pension, to lower your retirement date and still receive a full pension?

    No. The only potential way to move your retirement eligibility date closer is to purchase or transfer qualifying prior public service that you may have and combine it with your MOSERS pension. See our Purchasing and Transferring Service Credit brochure (MSEP 2011) for more information or contact a MOSERS benefit counselor to see if you qualify and if it would be beneficial for you to do so.

    In order for any prior public service to qualify, it must have been full-time, nonfederal, public (government) employment that you performed in Missouri. Examples include prior employment with a public school, city, or county in Missouri, or employment covered by the MoDOT & Patrol Employees Retirement System (MPERS). This could potentially make you eligible for retirement sooner if the extra service resulted in you hitting the Rule of 90 prior to age 67. (The Rule of 90 is available only to those still actively employed by the state.)

    You may also want to keep in mind that you are not required to keep working for the state until retirement age in order to get your pension. Once you are vested with MOSERS, even if you leave state employment, you will be eligible for a lifetime monthly benefit once you also meet the age and all other legal requirements and retire under a MOSERS defined benefit pension plan. Your benefit is calculated using the formula:

    Final Average Pay x Credited Service x Multiplier = Monthly Base Benefit.

    Remember, it is this formula, NOT employee contributions (made by those first employed on or after 1/1/2011), that determines your monthly retirement benefit. The longer you work, the more your benefit will be.

    You certainly can contribute more to MO Deferred Comp to increase your supplemental savings for retirement but it won’t make you eligible for retirement any sooner.

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  • Withdrawing Funds

    Aug 3, 2018, 3:59 PM By MOSERS

    Is possible to withdraw a portion of our annuity?

    No. MOSERS is a non-contributory defined benefit (DB) plan for members employed before January 1, 2011. As such a member, your employer pays the necessary contributions to MOSERS while you are actively employed so that you may receive a future monthly retirement benefit and potential survivor benefits. Since you do not pay contributions, you are not eligible to withdraw funds from the retirement system.

    Members employed in a MOSERS-covered position for the first time on or after January 1, 2011 are required to contribute 4% of their gross salary to help fund the retirement system. Those members, if they leave state employment, have the option of requesting a refund of the contributions they have made to MOSERS plus any interest on their contributions – if they do so prior to reaching normal retirement eligibility. Any member who receives a refund will forfeit service credit and the right to receive any future retirement benefits from MOSERS.

    Any refund of contributions taken as cash (as opposed to rolling it over to MO Deferred Comp, a traditional IRA, or other qualified retirement plan) is considered taxable income for the year you receive it. MOSERS is required to withhold 20% for federal taxes on such a refund. If you receive a cash payment before you reach age 59½ and do not roll it over, you may have to pay an IRS a penalty equal to 10% of the taxable portion of the payment in addition to the regular income tax. See our Special Tax Notice brochure for more information.

    The IRS does not currently allow pension plans to offer lump-sum payouts to current retirees in exchange for reduced future benefit payments. MOSERS did offer a buyout program which enabled eligible members to accept a lump-sum payment in lieu of all future annuity payments. However, this program was not available to members who had already begun receiving monthly benefits.

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  • Lump-Sum Payment Options

    Apr 3, 2018, 8:58 AM By MOSERS

    If I resign before my retirement date and am vested is there an option to take a lump sum payment? To either rollover into a personal IRA or cash out. If so how do I figure that amount?

    No, there is currently no lump-sum option in the scenario you described. If you are vested with MOSERS (you have at least 5 years of service) and then leave state employment prior to reaching the age to qualify for retirement eligibility, you would be considered a “terminated-vested” member. You will become eligible to begin drawing your lifetime monthly benefit payments once you also meet the age requirement (and all other legal requirements) and retire under a MOSERS defined benefit pension plan.

    The scenarios in which a lump-sum option are available through MOSERS are the following:

    1. BackDROP - Work in a MOSERS benefit-eligible position at least two years beyond normal retirement eligibility and then you can elect a lump-sum payment at retirement in addition to your lifetime monthly benefit payments.
    2. Refund of Employee Contributions - If you are a member of the MSEP 2011 or Judicial Plan 2011 (first employed in a MOSERS benefit-eligible position on or after 1/1/2011 and contribute 4% of our pay to MOSERS) and you leave state employment prior to reaching normal retirement eligibility, you may request a refund of your member contributions.
    3. If you meet the qualifications for the Cash Out program (available only to vested members of MSEP who left state employment between 10/1/1984 and 9/1/2002) or a “Buyout” program authorized by the legislature (among other eligibility criteria, you must not have worked in a MOSERS or MPERS benefit-eligible position at any time since 6/30/2017), you may be eligible for a lump-sum payment. However, no one currently employed in a MOSERS benefit-eligible position is eligible for either the Cash Out or Buyout lump-sum program.

    Keep in mind that any of the following may affect your retirement eligibility: Your retirement plan (MSEP, MSEP 2011, etc.), age, service, and if you retire directly from active employment versus leaving state government and waiting to retire. Contact a MOSERS benefit counselor to discuss your specific situation. You may also contact a MOSERS benefit counselor to request benefit estimates for various scenarios (including a scenario of leaving employment prior to retirement eligibility).

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  • Is the MSEP 2011 Still a Contributory Plan?

    Jan 18, 2018, 10:54 AM By MOSERS

    I have an employee who was hired June 2011. He has a question about the 5 year vesting. Since 5 year vesting is back he would like to know if Moser's will start contributing to retirement or if he will still have to make those contributions through his payroll.

    MSEP 2011 members will still have to contribute 4% of pay to their future retirement benefit. Other than the vesting period changing from 10 years to 5 years for MSEP 2011 members employed on or after January 1, 2018, 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.

    Money to pay current and future MOSERS pension benefits comes from:

    1. Contributions from employees who are members of the MSEP 2011 or Judicial Plan 2011 (4% of pay for MOSERS members; typically 5-10% nationally*),
    2. Earnings on investments of money in the MOSERS trust fund (61% of assets in the MOSERS trust fund have come from investment earnings), and
    3. Contributions from employers (state agencies) as a percent of active employee payroll.

    Below is a simplified example of what future retirement benefit might look like over time. The benefit would be even more with compounding cost-of-living adjustments (COLAs), which are included in MSEP 2011, but not shown here for simplicity. The benefit formula is:

    Final Average Pay x Credit Service x Multiplier = Monthly Base Benefit

    Assumpitions Chart

     

     *Understanding Public Pensions, April 2017, Center for State & Local Government Excellence, AARP

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Disclaimer

We strive to provide the most accurate information possible in our answers to Rumor Central questions. However, occasionally, laws, policies or provisions change and individual circumstances may vary. Please contact a MOSERS benefit counselor or see the handbooks in our website Library for more detailed information. If there is any difference between the information provided in this blog or on the MOSERS website and the law or policies that govern MOSERS, the law and policies will prevail. See our Privacy, Security,& Legal Notices for more information.

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