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  • Understanding your High 36

    Aug 12, 2022, 3:51 PM By MOSERS

    Good morning,

    I understand that a State employee's retirement benefit is based on the highest 36 consecutive months of pay. My question is whether or not there is a time limit on this rule. For example, if an employee's first 36 months of pay averaged $1,000, then the employee downsized to a lesser wage for the remainder of their career, e.g. $500 for 20 years, would the retirement still refer back to the 36 months at $1,000 despite the vast majority of the employee's career averaging $500?

    Yes, your final average pay, for the purpose of calculating your pension benefit, is your highest 36 consecutive months pay, regardless of when that occurs in your pay history. We will look at your entire pay history, as reported by your employer, and find the “high 36”. This can include overtime pay and holiday pay. All 36 months must be consecutive.

    Your base benefit is calculated using a formula, as defined by law, that takes into account the following factors:

    • Final Average Pay (FAP) – The average of your highest 36 consecutive months of pay
    • Multiplier – The multiplier established by the legislature
    • Credited Service – Your years and months of credited service earned, purchased, or transferred, and unused sick leave (if applicable)

      (Base benefit is the amount before any reductions, taxes, or other deductions.)

      Here is an example of how the base benefit formula works for a person whose gross pay is $50,000 per year (for at least 36 months) and who retires under MSEP 2011 with 25 years of service:

       FAP ($4,167) x MSEP 2011 Multiplier (.017) x Credited Service (25) = $1,770.98 monthly base benefit in retirement

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  • Final Average Pay (FAP) and "High 36"

    Jan 27, 2022, 4:06 PM By MOSERS
    Everyone talks about your "BIG THREE" as far as retirement goes. How does this work? Is it the top three in all years of service? Do they have to be in a row? Can they be spread out? Does that included Backdrop time? What if your income for the years served are higher than the salary of a specified job? For example, if you made $70,000 but your max pay for that job is $49,000 what is your retirement based on? Never was explained clearly. Thank You.

    When you retire, you will get a monthly pension benefit for life. Your base benefit is calculated using a formula, as defined by law, that takes into account the following factors:

    Final Average Pay (FAP) – The average of your highest 36 consecutive months of pay

    Multiplier – The multiplier established by the legislature

    Credited Service – Your years and months of credited service earned, purchased, or transferred, and unused sick leave (if applicable)

    (Base benefit is the amount before any reductions, taxes, or other deductions.)

     To answer your questions, specifically,

    • Is it the top three in all years of service? Do they have to be in a row? Can they be spread out? It is your highest 36 consecutive months pay. We will look at your entire pay history and find the “high 36”.  All 36 months must be in a row.
    • Does that include Backdrop time? No. If you elect BackDROP at retirement, any pay earned during the BackDROP period does not count in your “high 36”.
    • What if your income for the years served are higher than the salary of a specified job? For example, if you made $70,000 but your max pay for that job is $49,000 what is your retirement based on? We look at your gross pay, as reported by your employer, which may include overtime pay and holiday pay. We do not look at your job title or pay ranges.

     

    Here is an example of how the base benefit formula works for a person whose gross pay is $50,000 per year (for at least 36 months) and who retires under MSEP 2000 with 25 years of service:

     FAP ($4,167) x Multiplier (0.017) x Credited Service (25) = $1,770.98 monthly base benefit in retirement

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  • Monthly Pension Benefit Formula

    Nov 2, 2021, 3:06 PM By MOSERS

    I would like to ask a question about how re-employment with the State of MO would effect my current retirement plan/pension. I have been away from employment since 2008. If I would be able to attain employment within the next 3-6 months, or so, basically, how does it effect my retirement if I would be employed again with the State of MO, and any other pertinent information for "re-hire" after 13 years?

    Retirement benefits for general state employees (including university employees) are calculated using a three-part formula: FAP x Multiplier x Credited Service = Monthly pension benefit payment

    Learn more about your benefits in the Summary of Pension Benefit Provisions (All Plans) and by plan on our website: MSEP, MSEP 2000, and MSEP 2011.

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  • Final Average Pay with a Second Job Appointment

    May 14, 2021, 8:22 AM By MOSERS
    Some of our employees are working a second job direct care appointment with our facility in addition to their regular direct care appointment. As this is different from earning overtime that becomes comp time, their earnings are shown on their normal payroll as income earned. How will this benefit our employees working these second job appointments on their Final Average Pay (FAP) to calculate their pension benefits?

    Pension benefits are calculated using a formula, which is: Final Average Pay (FAP) x a Multiplier* x Credited Service = Monthly Base Benefit

    The additional earnings for working in a second job may increase their final average pay. Statutorily required employer and employee contributions must be paid to the System on any such compensation. See MOSERS Board Rule 2-8 for details. 

    However, state law says an employee can earn only one day of service credit for each day worked so it would not increase their credited service in terms of retirement eligibility or for calculating their benefit amount.

    Below is a simplified example showing how working in an additional position could potentially impact an employee’s benefit. Employees should contact a MOSERS benefit counselor to get an estimate for their particular situation:

    Working in one full-time position making $28,307 per year and retiring in MSEP 2000 with 25 years of service:

    $28,307/12 months = $2,358.92 as monthly final average pay

    FAP ($2,358.92) x Multiplier (0.017) x Credited Service (25) = $1,002.54 monthly base benefit in retirement

    Working in one full-time position making $28,307 per year and retiring in MSEP 2000 with 25 years of service plus working in a part-time position at the same rate of pay (an extra 1,000 hours at $13.61 per hour per = $13,610 per year for 3 years):

    $41,917/12 months = $3,493.08 as monthly final average pay

    FAP ($3,493.08) x Multiplier (0.017) x Credited Service (25) = $1,484.56 monthly base benefit in retirement

    *The multiplier for MSEP is 1.6%; the multiplier for MSEP 2000 and MSEP 2011 is 1.7%. 

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  • Overtime Pay and Your Pension Benefit

    Apr 27, 2021, 1:37 PM By MOSERS
    Is overtime included when figuring for an employee's retirement, or is their regular salary for the highest 36 consecutive months used in the calculation?

    Yes, overtime can increase a member’s pension benefits.

    Retirement benefits for general state employees are calculated using a three-part formula: Final Average Pay (FAP)  x credited service  x  a multiplier =  Monthly Base Benefit

    To calculate your pension benefit, we will use your highest 36 full consecutive months of pay – wherever that occurs in your individual pay history

    In identifying your “high 36” months, overtime pay is included in the pay period for which it was earned. 

    The multiplier for general state employees in MSEP is 1.6%; it is 1.7% for general state employees in MSEP 2000 and MSEP 2011.

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  • Pay Raise & Final Average Pay

    Apr 12, 2019, 9:33 AM By MOSERS

    Will the raise that we are suppose to get in 2020 effect my retirement? If I am already on my BackDROP and if I retire in dec of 2021.

    Assuming the pay raise is included in the final state budget and goes into effect in January 2020, if you continue working and do not take BackDROP, the impact of a pay increase on your monthly retirement benefit payment would be dependent upon how long you continue working.

    Remember, in calculating your monthly benefit, one factor is your Final Average Pay, which is your highest 36 consecutive months of pay. So, if you got a raise and worked a few months past January 2020, the impact may be very small. If you got a raise and worked an additional 36 months, the impact would be bigger.

    Any pay earned during your BackDROP period has no impact on either your monthly benefit amount or your BackDROP lump-sum amount. If you are 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 (and service) during the BackDROP period is excluded when calculating your monthly benefit amount.

    But, after you retire, keep mind that MOSERS retirees receive an annual cost-of-living adjustment (COLA) of 0-5%. This amount is calculated each January and is based on the CPI (Consumer Price Index), which is unrelated to any pay raises state employees receive. You can find more information about the retiree COLAs on our website.

    You can run benefit estimates under a variety of scenarios by logging in to myMOSERS or asking a MOSERS benefit counselor to run them for you. You may find our Creating a Benefit Estimate video and our Comparison Calculator helpful in weighing your options.

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  • Final Average Pay Calculation

    Jan 23, 2019, 9:15 AM By MOSERS

    I'd always thought retirement benefits were based on the highest pay of our state employment career. I was told by a coworker who recently attended a pre-retirement seminar that once you become eligible (under the rule of 80 for MSEP employees), that the highest pay rate considered for retirement benefits is already locked in and pay increases after that point will have no impact on retirement benefit. Please advise.

    What you heard is not necessarily true – so thanks for checking with us! Whether or not pay for a given period will be considered in determining your final average pay (FAP) depends on if you elect BackDROP* (if eligible); not when you hit “80 & Out”.

    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. 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 (and service) during the BackDROP period is excluded when calculating your monthly benefit amount.

    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 (regardless of whether that is before or after you might hit “80 & Out”) and will use that in calculating your monthly benefit. You may elect not to take BackDROP if you want all of your pay and service to count. In most cases, opting not to take BackDROP will increase your monthly benefit amount.

    *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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  • Calculating Final Average Pay

    Jan 18, 2019, 12:52 PM By MOSERS

    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

    Nov 29, 2018, 10:43 AM By MOSERS

    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 run benefit estimates under a variety of scenarios by logging in to myMOSERS or contact a MOSERS benefit counselor to run them for you. You may find our Creating a Benefit Estimate video and our Comparison Calculator video helpful in weighing your options.

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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.