Yes, if you are eligible for and elect BackDROP, you have three options for your BackDROP lump-sum payment:

• Cash Option: This is either one lump-sum payment at retirement or three annual installments. From any amounts paid in cash, we will deduct 20% for federal income tax (as required by the IRS) and any Missouri state income tax withholding you choose. You will be responsible for any IRS early withdrawal penalties that may apply.
• Rollover Option: We will send your tax-deferred distribution directly to a qualified employer plan, such as Mo Deferred Comp. 
• Combination Cash & Rollover Option: You can take a portion of the lump sum in cash (less 20% for federal income tax, as required by the IRS, and any Missouri state income tax you choose to have withheld) and roll the rest over to a qualified employer plan. You will be responsible for any IRS early withdrawal penalties that may apply.  

MO Deferred Comp is a qualified employer plan and you may be able to roll over your funds to them. Before you make any decisions, we recommend that you read the Special Tax Notice to ensure you understand the tax implications of your choice. We also encourage you to consult a tax professional. Read Thinking About the BackDROP? for more information.

On Monday, February 27, 2023, Governor, Mike Parson signed supplemental spending bill, HB 14. This bill will implement a cost-of-living adjustment for all active state employees, but it does not apply to retirees. However, all retired general state employees will receive a 5% COLA in 2023.

In the example you gave and assuming the employee elected a 5-year BackDROP, the BackDROP period would be the 5 years prior to when they actually retire.

The BackDROP period is the period of time between the employee’s BackDROP date (the day their BackDROP period begins) and their actual retirement date. The maximum BackDROP period is five years. The BackDROP date can move depending on when the employee actually retires and the BackDROP period they elect at retirement.

For example:

If the employee is initially eligible to retire 3/1/2023, but decides to work to 10 more years, retires 3/1/2033, and elects a 5-year BackDROP, their BackDROP period would start 3/1/2028.

If they elect a BackDROP, we will calculate their monthly benefit using their final average pay (FAP) and credited service as of their BackDROP date. We would look at the employee’s entire pay history prior to the BackDROP period and find the highest 36-consecutive months of pay. We will not include any service credit or pay (including pay increases, overtime, etc.) earned during the BackDROP period to calculate their monthly pension payment.

See the BackDROP page on our website for more information.

Note: BackDROP is available only to general state employees (including university employees) in MSEP and MSEP 2000. 

Your MOSERS pension benefit is subject to normal federal taxes. It is also subject to normal Missouri state income taxes if you are a resident of Missouri. However, because you are a Missouri resident, you may qualify for the Public Pension Exemption as it relates to Missouri state taxes.

In order to be eligible for the full deduction, your Missouri adjusted gross income must fall within certain income limitations. These limitations are not decided by MOSERS, you may contact the Missouri Department of Revenue to see if you qualify or ask your tax professional. If your income exceeds the limitation, you may qualify for a partial exemption. Visit the Missouri Department of Revenue's Public Pension Exemption page or read our Missouri Public Pension Exemption flyer for more information.

To update your direct deposit information, just log in to myMOSERS. Once logged in, click Forms, then select Direct Deposit. From there you can begin to fill out and complete the Direct Deposit Authorization form online or you can complete the paper Direct Deposit Authorization form and mail it to MOSERS.

If you need assistance, feel free to contact a MOSERS benefit counselor at (800) 827-1063 or (573) 632-6100.

We send Annual Benefit Statements in March to all active members. You can access last year’s statement by logging in to myMOSERS, clicking on Online Documents, and selecting Document Express. It is available to print or save as a PDF. Once all 2023 statements are sent, we will send you an email and you will be able to access this year’s statement by logging in to myMOSERS. If you have opted to receive paper notifications, we will mail your statement to you. Please be sure your email address and mailing address is up to date with us!

Retirees get their Annual Benefit Statement each year on the anniversary of their retirement date or BackDROP date. We send benefit statements to elected officials and members on LTD in July, and we send statements to vested former state employees once every 5 years. 

You are correct, there is a new form, which is required by the IRS as of January 1, 2023, IF you want to make any changes to your tax withholdings. (If you don’t want to make changes, no action is required.) Once you have completed both the Tax Withholding Authorization and the IRS W-4P forms and you have signed and dated them, you can return them to us by:

1. Faxing them to (573) 632-6103,
2. Scanning them and sending them as an attachment via email to mosers@mosers.org,
3. Submitting them using the Document Upload feature after you have logged in to myMOSERS
4. Depositing them in the drop box outside of our office or bringing them in to the receptionist, or
5. Mailing them to us at MOSERS, PO Box 209, Jefferson City, MO 65102-0209

Yes, 1099-R forms have been mailed! For immediate access to your 1099-R, or if you find you need a replacement copy of it, log in to myMOSERS. You will find your 1099-R under Personal Information and available for you to print.

The cost of life insurance coverage through MOSERS depends on your age. Please use the Optional Life Insurance Calculator to determine what your monthly premium will be in retirement. Please keep in mind the following regarding life insurance in retirement:

• You may retain up to $60,000 in coverage if you are a member of MSEP.
• You may retain all of your optional coverage until age 62 if you are a general state employee who retired under the “Rule of 80” (MSEP 2000) or the “Rule of 90” (MSEP 2011). At age 62, your coverage will automatically reduce to a maximum of $60,000.
• To keep your optional coverage, you must submit the Retain/Change Optional Life Insurance form (available in  myMOSERS). Use the same form to reduce or terminate your coverage at any time.
• Please note that you have 60 days from your retirement date to port or convert (continue) any remaining optional life insurance through The Standard.
• You cannot increase your coverage after retirement.

Congratulations on your upcoming retirement! Let’s address your questions one by one:

1. Are healthcare premiums taken out pre-tax in retirement? No. All deductions from your MOSERS pension benefit are POST tax.
2. As an employee, my premiums are taken out pre-tax to lower my taxable income. Does this happen with a retiree's pension payment? No. All deductions from your MOSERS pension benefit are POST tax.  
3. If healthcare premiums are deducted prior to federal tax deductions (while in retirement) than the prepayment of healthcare premiums (at year-end) would be the same, is that correct? No. Healthcare premiums in retirement are NOT deducted prior to federal taxes. So, there may be tax advantage to you to pre-pay your retiree healthcare premiums for the remainder of the calendar year from pay you receive as an active employee. See the information below from the MCHCP website:

Employees whose premiums are collected pre-tax through the cafeteria plan have the opportunity to pre-pay premiums pre-tax as a retiree. Prepaid premiums may only be paid within the same calendar year*. To prepay retirees must submit their enrollment request at least 31 days prior to their retirement date. The first month’s premium for retiree coverage will be divided between the last two active paychecks. Additional prepaid premiums may be collected from the retiree’s last two active paychecks and/or lump sum vacation/compensatory time payroll. Verify this payroll amount with the HR/Payroll personnel to determine how many months of retiree premiums can be prepaid.

*Employees with a retirement date of Dec.1 cannot prepay premiums, since future premiums would be for a different plan year. Employees with a retirement date of Jan.1 can only prepay premiums using funds from their final active payroll (usually Jan.15) and/or their vacation and compensatory time payroll.