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LAGERS Seeks to Enhance Flexibility of Employee Contribution Options
LAGERS is seeking legislation to further enhance the flexibility of the retirement system. Currently under law, a member employer has many options to tailor a retirement benefit that will meet the goals and needs of its unique workforce. The options for employer election range from the benefit multiplier, final average salary, retirement ages, and employee contributions.
The proposed legislation will expand an employer’s options available for employee contributions. An employer can currently elect to require all eligible employees to contribute 4% of their gross wage to help pay for the retirement benefit. Or an employer may elect to cover the full cost of the benefit with no employee contribution. The proposed legislation would expand the available options from 0% and 4% to 0%, 2%, 4%, and 6%.
This proposal is the result of many years of conversation between LAGERS employers, members, and affiliate organizations. LAGERS recognizes that no two employers in the system are the same and the flexibility of LAGERS’ plan design is one of the greatest assets for the system and the members we serve.
If passed, the legislation would not automatically make any changes to an employer’s election, rather, it would simply add additional options for election in the future. LAGERS believes that with this added flexibility, employers will have even greater ability to create a retirement benefit for their workforce that helps attract and retain the highest quality public servants into local government service and ultimately helps prepare each employee for a secure and dignified retirement.
New Report Shows How Retiree Spending Benefits Every County in Missouri
A new report released by the Missouri Local Government Employees Retirement System (LAGERS) shows the $8.1 billion pension fund paid over $333 million in benefits last year, with $309 million paid to recipients living in Missouri.
LAGERS retirees are former police officers, fire fighters, librarians, utilities workers, municipal administrators, and more. These retired public servants are receiving protected lifetime benefits based on their years on the job and salary earned during their career. Because LAGERS provides predictable monthly income, benefits paid from the pension fund help stimulate and stabilize the local economies where retirees live. More than nine-in-ten retirees stay in the communities they served while working and spend their pension payments on local goods and services. This provides a great economic reinvestment in Missouri.
“LAGERS provides a modest, but dependable, monthly benefit that helps our members avoid poverty in retirement and allows them to exit the workforce with dignity,” said LAGERS’ Executive Director, Robert Wilson. The average benefit paid to a LAGERS retiree in Missouri is around $14,000 per year.
The spending created by these pension payments creates an economic multiplier effect that produced an estimated $442 million of economic activity for Missouri, according to the National Institute for Retirement Security. As retirees spend money at local businesses throughout Missouri, those businesses are able to use the income to grow their business. This illustrates the cycle that starts with the pension contributions made by taxpayers to fund the benefits and those benefits being returned to the local communities when retirees spend the benefits they earned through their public service.
The report, that can be downloaded here, shows the benefit payments made to every county in Missouri. Download the latest Economic Impact Report
System Portfolio Earns 7.1% for the Year
September 23, 2019 - The Missouri Local Government Employees Retirement System (LAGERS), the pension fund that covers over 60,000 Missouri local government employees and retirees, had a 7.1% total return (net of fees) for the fiscal year ending June 30, 2019.
“For the year LAGERS’ portfolio performed well and within expectations. The Alpha and Equity allocations were hurt by the narrow breadth of outperformance in the equity market, specifically in US/Large Cap/Growth markets; while the Fixed Income and Real Assets allocations were helped by the shift down in interest rates and a renewed focus on cash-flowing asset based investments,” said Brian Collett, the Chief Investment Officer of the $8.1 billion LAGERS fund.
Additionally, as of June 30, LAGERS’ three, ten, and twenty year returns were 10.9%, 10.8% and 7.1%, respectively.
LAGERS’ is 94.9% funded on an actuarial value of assets and 95.5% funded using a market value of assets.
Gov. Parson Signs LAGERS’ Public Safety Personnel Bill
July 17, 2019 - Governor Parson signed SB 17 into law on July 10, 2019.
This legislation enables LAGERS-participating employers in third-class counties and Cape Girardeau county to choose to designate their jailors, EMS personnel, and emergency telecommunicators as public safety personnel with an age 55 normal retirement age. Jailors, EMS personnel, and emergency telecommunicators currently have an age 60 normal retirement age in LAGERS.
This legislation will go into effect on August 28, 2019.
More information on this change can be found on our blog
Five years in a row, Missouri LAGERS scores 4/4 on Annual Security Assessment
LAGERS participates in an annual security assessment of its core systems in an effort to keep members' and employers' information safe. For the fifth year in a row, LAGERS scored a 4 out of 4 rating, meeting and exceeding industry best practices for information security during its annual information security assessment held in June, 2019.
The assessment was performed by project engineers at nGuard, an outside firm hired by LAGERS to identify vulnerabilities associated with LAGERS' key systems, networks and processes.
LAGERS continues to follow its Board of Trustees directive to make the security of all members' information a primary focus and priority, and LAGERS staff is committed to this initiative to maintain a high level of security for our members and employers.
New Report Shows LAGERS is a Good Investment for Local Governments in Missouri
A new report released by the Missouri Local Government Employees Retirement System (LAGERS) shows that the pension plan is a small portion of local government budgets and is a good investment for employers.
In LAGERS first Pension Finance Survey, the pension fund asked around 700 local government financial officials about their views on the cost of the program. Almost all (97%) of the respondents said they believe LAGERS is a good investment for their organization. Only one responded that LAGERS is not a good investment and three responded that they didn’t know if it is a good investment.
The survey also found that contributions to LAGERS account for a small percentage of the overall local government’s budget. On average, only 2.8% of a local government’s budget goes toward paying the cost of the LAGERS program and over eight in ten respondents do not believe that LAGERS costs are a burden to their organization. These points likely contributed to the respondents saying LAGERS is a good investment.
According to LAGERS, the purpose of this survey was to gain insight into the funding of LAGERS benefits from their member employers’ point of view. The responses have helped LAGERS staff and board understand how member employers view their LAGERS costs and how these costs affect their overall operation.
From the LAGERS Annual Meeting: Strong Performance Updates, Educational Sessions, and Board Elections
October 26, 2018 - At the 2018 LAGERS Annual Meeting, updates were given about LAGERS strong performance, legislative updates, pension finance survey results, the important role of the LAGERS board, the new educational tools available and much more. As well, two current board members were re-elected to 4 year terms and another elected to fill the remainder of a term vacated by Kathy Barsczcak who retired from her LAGERS employer.
The meeting began with several educational breakout sessions that covered topics like How to Calculate LAGERS Benefits, LAGERS’ Disability & Survivor Benefits LAGERS’ payout options and much more. Each attendee had the opportunity to pick and choose which session they wanted to attend that best served their needs
After the breakout sessions were complete, the attendees had the opportunity to hear system performance updates from the LAGERS Board Chairperson, Arby Todd, LAGERS Executive Secretary, Bob Wilson, LAGERS Chief Investment Officer, Brian Collett and LAGERS Director of Investments, Megan Loehner. Overall, the reports showed the LAGERS system, as a whole, had a strong performance and continues to be one of the strongest funded pension plans in the country.
As well, Arby Todd announced the launching of a new Local Government Hero Award. This award is designed to recognize local government employees who are great example of what it means to be a public servant. Recipients can be anyone who is performing a public service and are a LAGERS member. For more information about the Local Government Hero Award, click here.
Finally, there were three Board of Trustee positions that were filled at the Annual Business Meeting. Barry McCullough, a current Employer Trustee from the City of Gladstone was elected to complete another 4 year term ending December 31, 2022. As well, Joan Jadali, a current Member Trustee from the City of Webster Groves was elected to complete another 4 year term ending December 31, 2022. Finally, Sandy Walker a new Member Trustee from the City of Poplar Bluff was elected to serve the remainder of a term ending December 31, 2020.
The Annual Meeting had many opportunities for stakeholders to learn more about the LAGERS pension system, hear updates about the system’s performance, and have input on the future direction of the pension system by participating in the board elections.
LAGERS’ Chief Investment Officer Announced as a Finalist for Innovation Award
LAGERS’ CIO, Brian Collett, has been named as a finalist for the Innovation Award from Chief Investment Officer Magazine. Under Collett’s leadership, LAGERS’ portfolio has beat its policy benchmark by 5.76% and its 7.25% assumed rate of return by 6.45% for most recent fiscal year that ended June 30, 2018. The returns also exceeded these benchmarks for each of the three, five, and ten year periods that ended June 30, 2018.
According to Chief Investment Officer, the goal of the Innovation Award is “to highlight the truly innovative approaches to asset owning and asset management, separating the merely different from the meaningful.” There are four other finalists in Collett’s category for “Public Defined Benefit Plans Below $15 Billion.” Finalists are chosen from hundreds of entries and only the “brightest and most forward-looking” asset managers are selected. The winner of the award will be announced on December 13th.
Collett has served as LAGERS CIO since 2005. His responsibilities include managing LAGERS’ investment portfolio and serving as the investment advisor to the LAGERS’ Board of Trustees. Prior to his CIO position, Collett held various positions across the investment industry including Senior Research Manager for the South Carolina Retirement Systems and a Senior Technology Analyst for the Russell Investment Group. Collett currently serves on several advisory boards for numerous US and global investment funds. He has a Bachelor of Science in Mathematics from Marian University and a Master of Business Administration from Butler University. He earned the Chartered Financial Analyst (CFA) designation in 1999 and the Chartered Alternative Investment Analyst designation in 2010.
LAGERS' CIO Named Among Top 30 Chief Investment Officers
March 28, 2018 - The Chief Investment Officer of the Missouri Local Government Employees Retirement System (LAGERS), Brian Collett, has been named one of the Top 30 Public Pension Chief Investment Officers by Trusted Insight.
According to their website, Trusted Insight is the world’s largest network of institutional investors and their top-30 list “features 30 industry thought-leaders that oversee stellar investment teams, expertly navigate the markets and are instilled with the compassion to serve the beneficiaries of US public pension systems.”
Brian was hired as LAGERS’ first CIO in 2005 and has transformed the System’s portfolio to be one of the top performing funds in the public universe. Under his leadership, LAGERS’ investments have produced a 9.45% annualized, net of fees, return over the last five years, which is 2.33% above the System’s policy benchmark and 2.2% above the System’s 7.25% assumed rate of return.
Brian holds the Chartered Financial Analyst® designation and is also a Charted Alternative Investment Analyst. He holds a Bachelor’s of Science in Mathematics from Marian University, a Master’s of Business Administration from Butler University, and currently serves on several advisory boards for numerous US and global investment funds.
Read Trusted Insight's news release here.
Missouri retirement system partners with UMass Medical School to enhance disability determination process
Missouri’s largest retirement system for local government workers has partnered with UMass Medical School’s Disability Evaluation Services to provide enhancements and support for its disability certification and re-certification process.
Determining disability eligibility is a critical component of the Missouri Local Government Employees Retirement System (LAGERS), a $6.9 billion system that covers close to 60,000 current and former local government employees within the state of Missouri.
“We were seeking to improve our process and access to expertise in our disability claim analysis and review. We were impressed with UMass’ depth of resources, degree of effort and desire to assist us with process improvement,” said LAGERS Executive Secretary Robert Wilson. “We’ve found them very responsive and dedicated to helping us improve.”
Read the UMass Medical School's press release here.
LAGERS Begins Administering First Legacy Plan
June 22, 2017 - On July 1st 2017, Missouri LAGERS will begin administration of the City of Jefferson’s Fire Pension Plan – its first legacy pension plan as allowed under the Local Plans Legislation which was signed into law last June.
“This has been a culmination of effort by our local government leaders, state legislators, and LAGERS staff, and we are excited to see our first plan transfer administration into our system,” says outgoing director Keith Hughes. “The heart of this legislation was truly to provide an alternative solution to local governments who wanted to get out of the pension administration business.”
And that’s just what the City of Jefferson will be doing on July 1st. “As far as both city retirees and LAGERS members are concerned, they shouldn’t notice anything different as we expect the transition to be seamless, but we hope that it will be a burden lifted on the city,” notes incoming director Bob Wilson.
“We have been overwhelmed by the positive response from employers across the state,” Wilson adds, “and we have several more employers already waiting in line to transfer their plans into LAGERS.”
The City of Jefferson originally joined LAGERS in 1970, but only offered LAGERS benefits to its general and police employers, while fire employees participated in a separate pension fund. The city has since closed their Fire Pension Fund and all new hires in the Fire Department now participate in LAGERS. Retirees in the closed Fire Pension Fund will, effective July 1st, begin receiving their pension check from LAGERS instead of the city, but will otherwise not notice anything different. The city, however, will no longer bear any of the administrative, actuarial, auditing, legal, investment, or compliance burden of managing a pension fund.
“This truly is a win-win for everyone. Retirees are assured their benefits remain secure and the city can focus on providing great services for its taxpayers. LAGERS is truly honored to be a part of this,” notes Wilson.
LAGERS' Megan Loehner named one of the Top 30 Women Rising Stars in Institutional Investing by to Trusted Insight magazine.
Jefferson City, MO - October 18, 2016 The Missouri Local Government Employees Retirement System (LAGERS) Director of Investments Megan Loehner was named one of the Top 30 Women Rising Stars in Institutional Investing by Trusted Insight magazine.
At LAGERS, Megan's job entails focusing on all aspects of portfolio management. She is a graduate of University of Missouri, where she received a B.S. and a master’s degree in accounting. Loehner is a Certified Public Accountant, a Chartered Alternative Investment Analyst and holds the Chartered Financial Analyst designation.
An excerpt of the interview with Trusted Insight:
"Many people don’t understand the math on what they would actually receive over a lifetime compared to what they contribute to their pension. It’s not that the systems don’t relay these important messages, sometimes the small negatives or the overbearing bold print on the front of the newspaper overshadows the large positives within the fine print, and sometimes there’s a disconnect in the desire to understand."
For more information or to read the article, go to
https://www.thetrustedinsight.com/rankings/top-30-women-rising-stars/
