My Benefit

 

Who guarantees that my LAGERS benefit is secure?

State law, RSMo 70.600-70.755, protects member benefits at the highest earned levels and mandates that every LAGERS employer fund those benefits in full through monthly contributions.

       Read our blog on this topic: How Secure is My LAGERS Benefit?

 

What happens to my benefit if I am laid off or fired?

State law protects a member’s benefits at its highest earned levels.  If you are laid off or fired, you are still guaranteed a benefit based on the amount of earned service with LAGERS.  In order to be eligible to draw a monthly benefit, a member must be vested with the system.  If you are not vested at the time of termination, you may still be eligible to receive that service credit provided you were to re-employ within the LAGERS system within 10 years and become vested.  If you choose not to re-employ with another LAGERS employer, you may take a refund of your member contributions (if applicable) plus interest, which will forfeit your service credit.

 

 

 

 

Retirement Ages

 

I’m an EMT, what is my retirement age?

EMTs are considered general employees for LAGERS purposes and have a Normal Retirement Age of 60.

 

 

If an employee comes and goes with the same employer, which service is counted toward the Rule of 80?

Years and months of covered time actually worked (full time) are counted toward the Rule of 80. Any time in which the employee is not employed in a full time covered position would not count toward the Rule of 80.

 

 

If an employee has worked for multiple LAGERS employers, how does this affect the Rule of 80?

ALL service credit is counted toward ELIGIBILITY for the Rule of 80 at the employer who has the Rule of 80.

 

Typical question: "I am 55 years old and have 18 years of service with my current employer "A" who has the Rule of 80. I have 7 years of service with my previous employer "B" who does not have the Rule of 80. How is my retirement figured?"

 

All service credit is used to determine eligibility for the Rule of 80 at employer "A" only. All 25 years of service credit and 55 years of age would give the employee the option to retire with an unreduced benefit at employer "A" for actual years of service at employer "A" (18 Years). Service at employer "B" (7 Years) would fall under the early retirement reduction factors since employer "B" did not have the Rule of 80. The two calculations would be combined into one benefit.

 

 

 

 

Final Average Salary

 

Does the 3-year FAS election change employee or employer contributions?

Employee contributions are always 4% or 0%, per an election by your governing body.  The cost to the employer does increase as the level of benefits increases.

 

 

If I work for more than one LAGERS employer, how is my final average salary calculated?

 

Your last 120 months of service will be used, regardless of the number of LAGERS employers in which you were employed.

For example: You work at "City A" for 10 years and then you leave to go to work for "City B," for another 10 years and retire.  Both cities are LAGERS members. Because LAGERS only looks at your last 10 years of wages, only the wages from City B in this case will be considered in the final average salary calculation. This final average salary will be used in the benefit calculation for all 20 years of service credit.

 

Read our blog to learn more about what is and is not included in your Final Average Salary

 

 

Contributions

 

Is the benefit program the amount that we will be contributing to LAGERS?

No, the benefit program is a multiplier in the benefit calculation and does not represent the amount either the employee or employer must contribute.

 

Does electing non-contributory increase the employer contribution rate?

Yes. The employer rate usually increases by about 3.6% - 3.9%.

 

Can I take a hardship withdraw of my accumulated contributions or borrow against my benefit?

No, LAGERS does not permit hardship withdrawals or loans against your pension. A member must terminate LAGERS covered employment and have a minimum one month break in service to be eligible to take a refund of his or her accumulated contributions.

 

Can I contribute more than 4% to increase my LAGERS benefit?

No, by law a LAGERS member may only contribute either 0% or 4% per the employer's election.  These contributions help offset the cost to the employer, but do not increase the members' benefit.  All benefits are based on LAGERS benefit formula, not an account balance.

 

May an employee withdraw his or her employee contributions if the employer makes the non-contributory election?

Employee contributions may only be withdrawn upon termination from the LAGERS system or if the subdivision's governing body elects to refund employee contributions. If a member leaves LAGERS employment and elects to take a refund of their employee contributions, all contributory service credit would be forfeited.

 

What happens to the employees' contributions after the non-contributory election?

The employees' accounts are frozen and continue to be credited with interest. These contributions will remain in the employee's account until retirement, termination or until the subdivision's governing body elects to refund the employees' contributions.

 

 

 

 

Survivor and Disability Benefits

 

Disability and Survivor Benefits are an important part of your overall benefits package, read our blog to learn more!

 

Do survivor/disability benefits cost extra…do we have to elect to have those?

The cost for survivor and disability benefits is built into the total employer contribution rate.  These benefits are provided to members without the need for a separate employer election.

 

What if I recover from a permanent disability?

In the event that a member were to recover from a permanent disability and could return to the position held at the time of the disability, the payments to the member would cease and LAGERS would restore service credit to pre-disability levels.  If the disability was duty related, LAGERS would also add service credit for the amount of time the member was receiving a disability benefit.  The member could resume earning towards a regular LAGERS retirement benefit.

 

I am a firefighter who qualifies for a duty disability.  Will my service credit be extended as if I had worked until age 55?

No, regardless of your regular retirement age, any member who qualifies for a duty disability will have his or her service credit extended as if they had worked until age 60.

 

Will my step children be eligible for a survivor benefit?

Only biological or legally adopted children are considered ‘dependent children’ for the purpose of LAGERS survivor benefits.

 

 

 

 

Designating Beneficiaries Prior to Retirement

 

What Benefits are Payable if I Die?

If an active LAGERS member were to pass away before retirement, LAGERS will look first to pay a monthly survivor benefit to any eligible spouse or dependent children.  If no monthly survivor benefit is payable, LAGERS will pay a refund of any accumulated member contributions to the designated beneficiary of record.

 

Who is Eligible for a Monthly Survivor Benefit?

Regardless of any beneficiary designation you make with the LAGERS office, Missouri state law decides who the eligible recipient will be on a LAGERS monthly survivor benefit.  A spouse of at least two years will be considered the first eligible recipient.  The two year rule is waived if the member's death was accidental or duty related.  If there is no eligible spouse, the recipient will automatically be any dependent child.  If there is no eligible spouse or dependent children, there is no monthly survivor benefit payable.

 

What if No Monthly Survivor Benefit is Payable?

If no monthly survivor benefit is payable, LAGERS will refund any employee contributions, plus interest, to your beneficiary of record.  If there is no eligible surviving spouse, no dependent children, and no member contributions at the time of the member's death, nothing is payable from LAGERS.

 

Who May I List as a Beneficiary for a Refund of My Contributions?

You may designate an individual, legal entity (such as a charity), trust, or your estate as a beneficiary.  You may designate more than one primary and/or contingent beneficiary to share equally in your accumulated contributions.

 

Why Should I List a Contingent Beneficiary?

A contingent beneficiary will only be eligible to receive your accumulated contributions should all your primary beneficiaries predecease your contingent beneficiaries.  Without a contingent beneficiary, your estate would determine how your contributions are disbursed should your primary beneficiary predecease you.

 

My Employer is Currently Non-Contributory, Do I Still Need to Designate Beneficiaries?

It is always a best practice to keep current beneficiaries on file with the LAGERS office.  LAGERS employers have the option to change their ‘Contributory Status’ once every two years.   This means that even if you are not contributing toward your LAGERS retirement today, there is always the possibility that you may in the future.  Likewise, if you at any time worked for a LAGERS employer who was contributory, or you made contributions in the past with your current employer (and you have not taken a refund of those contributions), they will still be accumulating interest in your LAGERS account and would be payable to your beneficiaries should no monthly survivor benefit be payable at the time of your death.

 

Where Can I View my Current Designations and Account Balances?

You can view your current beneficiary designations by logging on to the myLAGERS member page.  There, you may view your account information as well as make updates to your beneficiary designations.  You may also contact the LAGERS office to obtain  this information.

 

What Does My Eligible Beneficiary Need to Do in the Event of My Death?

In the event of your death, it is solely the beneficiary’s responsibility to notify the LAGERS system and submit the required Application for Survivor’s Benefit Form or Request for Refund of Employee’s Contributions by Beneficiary Form to the LAGERS office.

 

 

 

 

 

Prospective Members

 

What is LAGERS?

LAGERS is a non-profit public pension system created in 1967 by the General Assembly of the State of Missouri to provide retirement, disability, and survivors' benefits to Missouri's local government employees. LAGERS currently covers almost 650 employers, over 33,000 active members, and approximately 16,000 retirees.

 

What benefits does LAGERS offer?

LAGERS is a defined benefit retirement plan that provides retirement, disability, and survivor benefits.  All benefits are calculated using a simple formula that produces a protected and dependable monthly benefit for eligible members. Each employer's governing body elects the benefit options it wishes to provide to its employees. The options can be changed once every two years, but only through an election by the employer's governing body.

 

Which employee groups are covered under LAGERS?

All full time employees of a member subdivision must be covered under LAGERS. Each employer's governing body elects full time as either 1500, 1250, or 1000 hours per year.

 

How are LAGERS benefits calculated?

All LAGERS benefits are calculated using the following formula:

Benefit Factor X Final Average Salary X Years of Service Credit  =  Monthly Benefit for Life

 

 

What does it cost to join LAGERS?

There is no up-front lump sum or start up fee required. Each employer has a unique contribution rate based on its employee group and the benefits that are elected. Employees' prior service cost is amortized over a 30-year period. The higher the elected benefits, the higher the cost to the employer. Employees contribute either 4% or 0%, per an election by the local governing body.

 

How is LAGERS funded?

The LAGERS system is legally separate and fiscally independent from the State of Missouri and is funded through employer contributions, employee contributions, and the investment return of the system.  Investment return accounts for about 60% of the system's funding.  LAGERS uses the 'level contribution method' which equalizes contributions between the generations.  This way, retirement benefits are pre-funded rather than a 'pay-as-you-go' structure like the federal Social Security program.

 

Can a member subdivision later elect to eliminate LAGERS coverage?

LAGERS benefits are protected by Missouri state law and cannot be taken away. As such, there is no exit provision under law, thereby guaranteeing eligible employees a monthly benefit for their lifetime.

 

What are the steps in the membership process?

A prospective employer must receive an initial actuarial valuation (cost study) of all LAGERS benefit programs. The cost study must be made public information for 45 calendar days. The subdivision's governing body may then pass an ordinance / resolution to formally become a member of LAGERS.

 

What about the 45 day public information period?

The cost study must be public information for 45 calendar days before a governing body may pass a resolution to join LAGERS.  Most employers utilize board minutes to disclose public information.

 

Are there any elections the governing body may never change?

The following elections, once made, can never be changed.

 

Hourly standard for full time employee (1500, 1250, 1000)

Amount of employees' prior service covered(100%, 75%, 50%, 25%)

Election to become a LAGERS member

 

What is the initial actuarial valuation?

The initial actuarial valuation (cost study) is a booklet that establishes employer contribution rates for all LAGERS programs. The figures in the cost study are unique to each employer because they are based on that employer's personnel. Beginning the membership process by receiving the cost study DOES NOT obligate the employer to join LAGERS.

 

 

 

 

Employer Rates

 

Is there a limit on how much an employer's rate can change in a year?

Yes, by law, an employer rate may not increase more than 1% in a given year.

 

 

 

 

Service Credit

 

My employer elected to cover less than 100% of my prior service.  Can I get credit for any more of that time?

Yes, if an employer elects less than 100% prior service coverage, vested members can individually purchase time not covered toward their benefit.  Purchased service would not be included in the calculation of final average salary.

 

 

Why did my employer elect less than 100% prior service.

There are many reasons an employer may choose to grant less than 100% prior service to its employees. The more prior service employees have, the higher the cost. While it is desirable to give full service credit for prior (full time) employment, a subdivision can gain financing flexibility by electing to cover 75%, 50% or 25% of prior employment rather than 100%. Once elected, the amount of prior service granted cannot be changed.

 

Some employers may also not be eligible to grant prior service credit if they have had a previous retirement plan that LAGERS determined to be 'similar in purpose.'

 

Do I have to purchase all my service at once?

Eligible service may be purchased at any time prior to a member's retirement and may be purchased in chunks or all at once.  Members purchasing service also have the option to pay for purchased service in a lump sum or in installments to LAGERS.

 

 

 

 

Retirees

 

Is there a Social Security offset to my LAGERS benefit?

No, receiving Social Security does not affect your LAGERS benefit in any way.  However, if you work in a position not covered by Social Security, your Social Security benefit may be affected.  Please visit http://www.socialsecurity.gov/retire2/wep.htm for more information.

 

Why didn’t I get a post retirement adjustment this year?

You may not yet be eligible.  To be eligible for your first post retirement increase, you must be retired for a full 12 consecutive months, including an October 1st.  For example, if you retired November 1, 2012, you would not receive your first adjustment until October 1, 2014.

 

Is there a limit to how much my benefit can increase?

No, there is no lifetime maximum on a retirees' cost of living adjustments.

 

What is Option D?

The Option D payout option is a complete lump sum cash payment to retirees when the reserve value of their allowance at the time of retirement is less than $10,000. Retirees with a reserve value greater than $10,000 are NOT eligible for Option D. If a retiree chooses Option D, a monthly allowance is forfeited.

 

What happens if my beneficiary passes away and I’ve elected Option A or B?

A member who elected Option A or B and is receiving a reduced benefit to ensure a benefit will continue to his beneficiary may enact the ‘Pop-Up Provision’ should his beneficiary predecease him.  The Pop-Up Provision removes the Option A or B reduction so that the member will begin to receive 100% of their unreduced Life Option amount.  The member must notify the LAGERS office in the event of a beneficiary’s death.

Once enacted, a member is locked into the Life Option and may not designate a new beneficiary under Option A or B.

 

 

 

 

Couldn't find the answer you were looking for?  Email us today at info@molagers.org

Missouri Local Government Employees Retirement System

Phone:   1-800-447-4334      Local:  573-636-9455        Fax:  573-636-9671     Email: info@molagers.org

 

701 West Main St.     PO Box 1665     Jefferson City, MO 65102