What is LAGERS?
What benefits does LAGERS offer?
- Retirement, disability and survivor benefits are provided
- LAGERS is a defined benefit system, all benefits are calculated using a formula
- Each subdivision's governing body elects from almost 200 different combinations of benefit options.
- Options can be changed once every two years, but only through an eleciton by the subdivision's governing body.
Who is covered under LAGERS?
- All full time employees of a member subdivision must be covered under LAGERS.
- Each subdivision's governing body elects full time as either 1500, 1250 or 1000 hours per year.
How are LAGERS benefits calculated?
All LAGERS benefits are calcuated 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?
- 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 governing body.
How does LAGERS pay benefits?
- Retirement benefits are paid monthly for the lifetime of the member.
- LAGERS investment income pays about 70% of the employee's benefit
- Employer and Employee contributions are collected by LAGERS in order to pre-fund the employee's benefits.
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 a 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 take action on LAGERS membership.
- Most employers utilize board minutes / discussion 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 granted (100%, 75%, 50%, 25%)
- Election to become a LAGERS member.
Explain the cost study.
- The cost study (Initial Actuarial Valuation) is a 35-40 page booklet that shows employer contribution rates for all LAGERS programs.
- The figures in the cost study are unique to each subdivision because they are based on the subdivision's employee group.
- Beginning the membership process by getting the cost study DOES NOT obligate the employer to join LAGERS.
CLICK HERE TO BEGIN THE MEMBERSHIP PROCESS...
