MSEP 2011 Overview. Presented by Katy Lacy. HR Specialist, MOSERS

Transcription

1 MSEP 2011 Overview Presented by Katy Lacy HR Specialist, MOSERS

2 Agenda Defined Benefit Overview Funding Plan Basics Contribution Value Formula Terminating Before Vesting Tools for Employees and HR

3 Defined Benefit Plan Basics Legislature Missouri Revised Statutes MOSERS Board of Trustees Defined Benefit Plan Ten year vesting Paid monthly for life Amount set by formula

4 Retirement Funding MOSERS Trust Fund ($8.6 Billion) Employer Contributions (16.97% for FY 2016) Employee Contributions* (4% of Annual Salary) FAQ: How much of state budget goes into securing retirement benefits for eligible employees? A: Approximately 1.3%. Investment Earnings (2/3 of fund amount)

5 Interest Employees hired for the first time after July 1, year vesting period 4% Member Contribution Eligible for retirement at 90 and Out or at 67 with 10 years of service

6 Interest Interest accrues on member contributions As long as member remains an active employee If terminate employment after becoming vested, interest accrues until member either withdraws the funds or reaches normal retirement eligibility If leave employment before becoming vested, member may leave contributions with MOSERS but will not earn interest nor be eligible for any benefits from the system, including LTD benefits (unless return to state employment at later date)

7 Contribution Value Estimated value of member contributions Hired Age 34 Starting salary $22,000 Begin contributing 4% of pay to MOSERS Retire Pass away Age 62 (Retire under Rule of 90 ; worked 28 years) Ending salary $37,552 (using 2% COLA) Total 4% contributions paid to MOSERS = $32,605 or $97 a month Monthly retirement benefit $1,460 Age 87 MOSERS base benefit paid for 25 years in retirement = $551,149 (using 2% COLA) Stress the importance of having a beneficiary on file with MOSERS!

8 Formula to Determine MOSERS Benefit FAP x Multiplier x Credited Service = Monthly Benefit $ FAP Average of highest 36 consecutive months of pay % Multiplier Established by legislature Credited Service Earned or purchased service time MONTHLY BENEFIT

9 Temporary Benefit Ends at age 62 With Rule of 90 Not for early retirees Not for survivors or beneficiaries Same three-part base formula except temporary multiplier is 0.8% (0.008) FAP X Multiplier X Service = Benefit

10 Example Benefit Calculation Base Benefit $3,000 x x = $ 1,199 Temporary Benefit (stops at age 62) $3,000 x x = $ 564 $ 1,763

11 Terminating and Contributions Four options for Contributions Leave with MOSERS Rollover contributions to IRA or other qualified plan Full refund (penalties apply) Combination of rollover and cash If members receive a refund, they forfeit accrued service credit and waive future rights to retirement benefit from MOSERS!

12 MOSERS Website Log-in to view benefit estimates View/Change beneficiaries Check Document Express View Contributions And much more

13 Pre-Retirement Seminars Quarterly webinars Recommended 5 years before retirement Register online

14 Life Insurance Basic Term Coverage Provided by State Active: 1x Annual Salary Retired: Flat $5,000 Optional Life Insurance available for: Member Spouse Children

15 Long Term Disability Benefits FREE insurance The state pays the premiums Protects your earning ability by providing partial income replacement in the event you become disabled (up to 60% of your salary) Covered on your first day of employment

16 Why is LTD Valuable? Continue to earn service credit towards retirement Survivor Benefits Reasonable accommodations expenses to help you stay in or return to active work

17 Social Security MO Deferred Comp New employees automatically enrolled at 1% contribution rate Low management fees Part of members three legged stool for retirement

18 Resources for HR MOSERS NEO Packet Videos Printable Materials And more! HR Updates

19 Questions? Contact MOSERS at (800)