Pension-Related Legislation

 We recently received two Rumor Central questions about pension-related legislation: 

Are you going to summarize the actual pension changes enacted by the legislature during the current session? And when will the summary be available?

I heard that the retirement vesting time has changed for FTE MOSER-eligible employees from 10 years to 5 years, effective Jan. 1, 2018. Any truth to that?

Yes, it is true that the legislature changed the vesting requirement for MSEP 2011 members, pending Governor Greitens’ approval. The Governor has until July 14 to approve or veto legislation. The Missouri House and Senate Truly Agreed and Finally Passed (TAFP) HCS SS SB 62 on May 11th. If signed by the Governor, the 10-year vesting requirement for MSEP 2011 members will be changed to 5 years. In order to do this, policy makers had to provide “offsets” so that the change would not increase costs for the state. To that end, the following offsets apply to new terminated-vested MSEP 2011 members*:
•       They are not eligible to receive service credit for any unused sick leave.
•       If they die prior to normal retirement eligibility, benefits will not be payable to their survivor until the member would have become eligible for normal retirement.
•       They will not receive a cost-of-living adjustment until the 2nd anniversary of their retirement.

The same bill also contains language authorizing a pension buyout to terminated-vested members. Below is a summary:

•       The legislation gives the MOSERS Board the authority to establish and offer a buyout program to terminated vested members in lieu of retirement annuity benefits otherwise payable – but it does NOT require the board to do so.
•       Members who make an election to accept such a buyout will forfeit their credited service and, if they return to state employment, will be considered a new employee.
•       The authority for the board to establish such a program ends 5/31/2018.
•       If the MOSERS Board establishes a buyout program, it is anticipated that we will send packets to eligible terminated-vested members in September 2017.

MOSERS will provide more information via our website and social media when the Governor acts on this legislation. Please ensure that both your email and mailing address are up to date with MOSERS so that you will receive important information from us if you are affected by any new legislation.

*A terminated-vested member is someone who has left state employment but has enough service to qualify for a pension benefit in the future once they also reach the age requirement for retirement.