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MSEP vs. MSEP 2000
The MSEP and the MSEP 2000 have various differences including different multipliers in the formula used to calculate your monthly payment, different benefit payment options, different cost-of-living adjustment (COLA) provisions, and different retirement eligibility criteria. The Temporary Benefit is available in MSEP 2000 but not in MSEP. See the Summary of Pension Benefit Provisions (MSEP & MSEP 2000) for a side-by-side comparison of provisions.
Benefit Payment Option
• The MSEP provides “free” survivor benefits for your spouse (Unreduced Joint & 50% Survivor). “Free” means that your retirement benefit is not reduced to pay for the future survivor benefit.
• There are no “free” survivor benefits under the MSEP 2000.
• In most cases, the increase in the base benefit formula in the MSEP 2000 will partially, or more than, offset the effect of the difference in the payment option reduction factors between the two plans
• You will receive a COLA each year for your lifetime regardless of which plan you elect (0-5%).
• The maximum COLA rate for both plans is 5%.
• If hired before August 28, 1997, the MSEP provides a minimum 4% COLA each year until the total increases equal 65% of your initial benefit. Generally speaking, you will receive 4% for approximately 12 years. After you reach the 65% COLA cap, the COLA rate will be equal to 80% of the percentage increase in the average Consumer Price Index (CPI) from the previous year.
Temporary Benefit (MSEP 2000 only)
• The temporary benefit could significantly increase your MSEP 2000 benefit. However, if you are older than 62 when you reach retirement eligibility, the temporary benefit has no value to you.
• At age 62, the temporary benefit and any COLAs earned on that amount will stop.
• The temporary benefit is not considered in determining potential benefits for your survivors. If you die while receiving the temporary benefit, any survivor benefits will be determined by the base benefit amount and the option elected
We have a helpful Comparison Calculator on our website where you can compare the long-term impact of electing MSEP versus MSEP 2000, different BackDROP* periods under the different plans, and various other options. The Comparison Calculator videos are helpful in demonstrating how to use this tool. You can also contact a MOSERS benefit counselor to ask that they provide you with various benefit estimates and Comparison Calculator results.
We also encourage you to attend a Ready to Retire webinar when you are within 5 years of eligibility. We will post the 2021 schedule to our website soon. This free webinar includes information on differences in the plans, benefit payment options, and BackDROP, among other topics.
Please note that your defined benefit retirement plan through MOSERS includes a lifetime benefit for you, the member, regardless of the plan or payment option you elect at retirement.
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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.