August Article Roundup

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Here are some interesting retirement and industry related blogs and news stories we’ve found this month.

We marketers at LAGERS often discuss how we can get our message to our millennial member audience. The younger portion of our member base just doesn’t seem to pay as much attention to us. Unfortunately, this is the best time for them to think about their retirement goals. This article is a good indication of how this group feels about saving for retirement. Turns out, they’re a bit intimidated by the whole process.

Read “Most Millennials View Retirement Savings Goal as Impossible” here

Millennials, learn from your elders! This next post opens with the line, “The biggest regret those of us in our 50s and 60s have about our later years is not having planned early enough for our retirement years.” Then follows with four more pre- and post-retirement mistakes that all of us can avoid if we take the time to plan and prepare.

Read “5 Retirement Mistakes to Avoid” here

Did you know that life expectancy increases by 2-3 years every decade?  It’s typical for adults now to live well into their 90’s, and today’s children easily expect to live to 100! This is great, right? Well, yes, but it poses new challenges for your retirement plan. If 70 is the new 60, how do we plan to live 30 years in retirement? Be sure to also check out the related reading, Retirement planning in 3 steps.”

Read “How to Retire If You’re Going to Live to 100” here

This article from Benefits Pro gives us a peek behind the curtain at what industry experts see as the main causes for concern among those trying to plan for retirement.  The process can be intimidating and seem complicated to the average person, but with patience and education industry professionals can guide even the most confused person through the process towards a successful retirement. After all, “Rocket science isn’t rocket science to a rocket scientist, but it is to everyone else.”

Read “3 General Concerns that Thwart Retirement Saving” here

Another industry article we want to make you aware of comes from Gary Findlay, former Executive Director of the Missouri State Employees Retirement System (MOSERS) right here in our home state. It’s important that all of us are aware of the anti–pension / Defined Benefit critics and their arguments against our pension systems. In any financial endeavor, there are risks, and therefore, fears. Overcoming those fears and educating our members  so that all of us can take up the fight is the best way to combat the naysayers.

Read “Overcoming Fear, part 1” here

Read “Overcoming Fear, part 2” here

 

3 Things I Learned From Being a Firefighter for a Day

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Recently I was able to be a firefighter for a day. Well, not really a full-blown firefighter, but I did have the opportunity to participate in a Fire Ops 101, which is basically a slightly more timid, highly controlled training day for people who realistically have never even operated a fire extinguisher.

This particular Fire Ops 101 was a joint effort between the Lee’s Summit IAFF Local 2195 and the City of Lee’s Summit Fire Department.  According to the International Association of Firefighters website, “[Fire Ops 101 is an event that] exposes participants to the smoke, the adrenaline rush, and the physical stress and strain fire fighters and emergency medical personnel face while protecting communities . . .” Let me tell you, this is an accurate description.  Here are some of the things I took away from this awesome experience.

You have to move quickly, all the time.

I wouldn’t describe the entire day as a full-blown sprint, but it did seem as if I was participating in seven hours of interval training. Short periods of moderate to intense physical activity followed by short periods of rest, but we were always moving quickly. Frankly, we had to in order to keep up with the real firefighters. Just walking between the training stations was a small workout because I wasn’t used to wearing the gear.

The first thing I noticed about the gear was the weight. The firefighter responsible for our team told us that by the end of the day our shoulders and necks would be sore just from the weight of the jacket and helmet. Yep, he was right. So if just walking around at a quick pace is difficult for a newbie in all this gear, moving at a quick pace through the training evolutions was much harder.

Firefighters take care of each other.

The firefighter that was leading my team constantly had his head on a swivel. He was always checking and double-checking to make sure his team was whole. Even when we were just standing 28081090671_e28ea26c0e_h (2)around drinking water, he made sure we were all together. Once, one of our teammates was separated from us for a few seconds after a water break. Our leader noticed immediately, while the rest of us simply continued to the next training evolution. “Wait, hold up,” he said. “We’re missing someone.” After the tardy teammate rejoined the group, I asked our leader about his protective mentality. I wanted to know if this was just something he was doing for that day or if there was something deeper at play, which I suspected was the case.

“As firefighters, we are never alone, like never,” he said. “It’s not safe to be alone. Even at the fire house if we’re in a room by ourselves it’s a little weird because it never happens. We’re trained to do everything at least in tandem to keep each other safe.”

Physical strength and stamina are key.

I consider myself a reasonably fit guy but I soon found out during Fire Ops that my workouts had nothing on the functional strength and stamina required to do the job of a firefighter. One thing the firefighters continually stressed throughout the day was that there was no fire, we didn’t need to push ourselves as hard as they would because we were not dealing with a life or death situation. But I wasn’t there to play dress-up, I was there to just get a little taste of their world. I was first to volunteer for everything and I pushed as hard as possible. I really wanted the full experience.

But it was hard. The tools are heavy, the boots are heavy, the helmet is heavy, and the air pack is VERY heavy. And, let’s be honest, I was just playing dress up. There was no fire. There were no consequences if I didn’t move fast enough or if I was too rough dragging the “victim” (150 lb. dummy) from the smoking building. I had no mental stress worrying about what would happen if I placed my foot in the wrong spot causing the floor to give way below me. But for the firefighters, there are real consequences if things go wrong. They have to be physically and mentally prepared to minimize the risk of mistakes that could get someone killed.

Possibly the greatest thing I took away from the Fire Ops was an admiration for how much pride these men and women have in serving their community. They truly have a calling and are acting on it every day. These firefighters really care about the citizens they serve and they take their responsibilities very seriously.  They train hard so they can be ready to answer the call, to save lives, to keep us safe. I have always had a great respect for the firefighter profession, now I have a much deeper appreciation for what they do for us.

Jeff Kempker Manager of Member Services

Jeff Kempker
Manager of Member Services

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WHY I CHOSE LAGERS – A CAREER TRANSITION

I am so happy to be a part of this team. After about 15 years in media and advertising, I was ready for a change. I was ready to get back to my roots as a communications professional. Since my most recent experience was in digital media, I felt myself getting further and further away from aspects of my career that I had loved in the past:

Service to others and working with people out in the field

The creative process and the bigger picture

Writing, designing and conceptualizing solutions

While I am grateful for the experiences I had in the rapidly changing worlds of social and digital media, I wanted to be able to once again use my skills as a trainer, public speaker and integrated communications expert. I also wanted to bring my digital, social and content marketing skills to an industry that posed challenging potential for growth in these areas. Getting back to work in all forms of media, including traditional, disruptive and emerging media was also important to me. Being a communications specialist at LAGERS allows me to meet these goals.

As many may know, a career in media and advertising can be pretty “dog-eat-dog.” There can be high burnout and turnover. At the beginning of my career I spent some time as a local government worker in public information, and as a state of Missouri communications professional. It felt right for my family and my career to transition back into that type of role. Enter LAGERS.

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Other than what I have mentioned above, here are some other reasons why I feel fortunate to be a part of this organization:

  1. I get to provide valuable service in the form of education to people who serve the communities they live in. It’s no secret that public sector workers typically do not get paid as well as some in the private sector, and the people who work in public service to their communities deserve to be recognized for keeping things together. I am happy to assist these valuable unsung heroes in understanding the services that LAGERS provides by giving them a secure retirement income.
  2. We provide local government employees with a very well deserved benefit. Pensions are seen in the private sector as a dying breed of financial security, a benefit from the Mad Men era that private companies no longer provide to even the most dedicated employees. In my very short time at LAGERS, I’ve met many people who have worked at their organizations for 30, sometimes even 40+ years. How often to you see that type of dedication in the private sector these days? It deserves to be rewarded with a dignified exit from the workforce for the hard work and dedication these people give to their communities. (For more stories on the dedication of these workers, visit our YouTube channel.)
  3. Internally speaking, something that intrigued me from the interview process was that the people I met continually said the same thing, which was “this is a GREAT place to work,” usually followed by “people don’t normally leave, they just stay till retirement.” I take this as a sign of a good organizational culture, where people are valued, cultivated to grow their careers and given good benefits that make them want to stay. This is a very dedicated group of people.
  4. LAGERS product is sound and secure – despite what you may hear. In this age where more people are entering retirement than ever before, and less are financially prepared to spend the next 30 years of life in retirement, having an opportunity for secure income in retirement – for life – is appealing to say the least. After learning more about the LAGERS system, I realized that a lot of the adversity in the media to traditional pensions just doesn’t hold water. At least not ours.
  5. The team I’ve joined is not your traditional stuffy old-school communications department (no offense to my other communications colleagues, but y’all know what I’m talking about). They work collaboratively to try and keep us on the forefront of new ideas and ways to communicate to our members and the general public. Just check out our social media and content marketing presence if you don’t believe me.

Another personal thing that working for LAGERS is doing for me – my husband and I have mostly worked in the private sector for the majority of our careers, and planning for retirement was always his responsibility, or as I like to call it, “his department.” Let me tell you as a professional in this industry, that is not the way to go. Working for LAGERS has introduced me to a new industry that is exciting, interesting and ever-changing in its own right, and being a part of this organization is forcing me to pay attention to things that I have notoriously neglected over the years. As I am educating others on the importance of planning for the future, I’m learning quite a bit about it myself.

New to LAGERS Monthly Reporting? Here’s some tips to get you started!

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So, you just started working at your employer as the person repsponsible for payroll, bill paying, human resources or all of the above. You may have come from a position that doesn’t have a retirement plan like LAGERS, which can make our reporting processes seem difficult.  So, here are some pointers about our monthly reporting process and why some of the processes are the way they are.

First and foremost,  it’s a great idea to familiarize yourself with the LAGERS system. LAGERS may be unlike what you’re used to because it is a defined benefit plan. If you came from a place that only had a defined contribution (401k) plan, the nature of the information we need gathered may seem a little off kilter. That’s because with a defined benefit plan like LAGERS, the benefit is based on a person’s compensation and service. There is no account balance that drives the benefit. With that said, here are a few pointers to help you out with the monthly reporting process.

  • Who is covered by LAGERS? When joining  the LAGERS system, each employer elects an annual hours designation for coverage purposes. The employer can elect coverage as an employee working 1,500, 1,250, or 1,000 hours on a rolling calendar annual basis. Any person working the coverage hours or more must be covered under the LAGERS system and does not have the individual option to not participate.
  • How do I report a new hire? Any new employee who is going to be working in a covered position must have an enrollment completed on ECLIPSE (LAGERS online reporting tool) as soon as they are hired. Enrollments are completed online. However, you can use the paper enrollment form for your internal purposes.
  • What is the free 6 month period? Every new employee that you hire may be eligible for the free 6 month period where no employee or employer contributions are due.
    • If the new employee has never previously worked for a LAGERS employer, they will receive a free 6 month period.
    • If they took a refund or lump sum of a previous LAGERS benefit, they will receive a free 6 month period.
    • If the employee has previously fulfilled their free 6 month period with another LAGERS employer(s), you will begin employee and employer contributions immediately.
    • The ECLIPSE system will monitor the free six month period and will show you when contributions will be due on the employee’s behalf.
  • Completing your monthly wage report. Here are few things to know about completing your monthly wage report.
    • The report is due on the 12th of the following month. You will receive an e-mail notification in the last week of the month.
    • You must report total gross wages including elected deferrals. Also included in reported wages is any paid overtime, recurring bonuses, sick or vacation time used, and allowances. Any non-recurring lump sums (vacation payout at termination) are not included.
    • You need to report wages on a when paid basis, not when earned. For example, if your employer paid two paychecks in the month of August, you will report the total of the two paychecks paid in the month of August for the August wage report, regardless of when the wages were earned.
    • When employees transfer between the General and Public Safety (Police / Fire) department, you must terminate them from the General Department and enroll them in their new department.

Monthly reporting is an incredibly valuable and important task. It is certainly not our expectation that you know every inner working of the LAGERS system. However, I hope this blog gives you some tips and pointers that can help you navigate this new responsibility. As always, if you have questions, feel free to contact us!

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Jeff Pabst, CRC Senior Communications Specialist

The Silver Tsunami is Upon Us. Is Your Organization Ready?

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There is a phenomenon occurring right now in this country known as the “Silver Tsunami.” The Baby Boomers, those born between 1946-1964, are exiting the workforce in droves, taking with them decades of knowledge and experience.  While this is affecting all sectors of our economy, the government workforce is on average older than the private sector and will be hit especially hard by this transition.  At LAGERS, we too are feeling this shift in the tide. When I started at LAGERS 12 years ago, we were hosting nine pre-retirement seminars per year.  Next year we are planning to host 34 seminars in order to accommodate all of our members closing in on retirement.  In 2004, the year I joined LAGERS, we saw 898 members retire.  Last year, that number had ballooned to 1,698.

Attracting quality people to work for local government will be a priority for Missouri’s political subdivisions in the coming years.  It will become vitally important for government leaders to examine the way they attract talent to fill the void the Boomers will be leaving. This issue is on the radar for many government leaders in Missouri.  I have had discussions recently with many management teams about using their LAGERS pension as a tool to attract and retain a quality workforce.  One such meeting centered around using the Rule of 80 to help lure young people.  Another entity spoke to me about how they believe LAGERS benefits will help them recruit replacements as their current employees retire.  So how are local governments to approach this wave of workforce change?  I have compiled some tips from various sources to help address the great opportunities ahead.

Governments may need to adjust their culture.

Elizabeth Kellar is the President and CEO of the Center for State and Local Government Excellence and deputy executive director of the International City/County Management Association.  She has been examining this issue closely and says that governments may need to adjust the culture of their work environment to make the structure more attractive to younger workers.  In a June 21, 2016 article by Kellar on Governing.com, she writes “Perhaps the most important commitment is for governments to become learning organizations. To fill many positions, governments not only must seek qualified applicants from the outside and market themselves, but they also need to be prepared to bring back retirees to work on projects and to mentor young talent.”

As Kellar put it, Millennials, those born between 1980–1996, “are ambitious and eager to build their skills and expertise quickly.”  Because of this, they often seek to learn from a progressive and forward-thinking employer.  Millennials are also concerned with making a difference in the world and respond well to public service opportunities.  Governments would be wise to emphasize public service and community enhancement when targeting younger workers.

Knowledge transfer will be a key component of this transition.

Experienced workers are valuable.  They know all of the best ways to complete a job without having to look at a manual.  I spoke with a spouse of a LAGERS member at a recent pre-retirement seminar who was attending in place of her husband who was busy training both people who were replacing him when he retired!  Rodney Bourne, the General Manager of Rolla Municipal Utilities, uses a simple story to illustrate the value of experience. He said that if you ask an inexperienced utility worker where the water lines are, he would say that they are in the ground.  But an experienced worker will be able to tell you the exact location of all the water lines throughout town, without looking at a map or diagram.

Local governments will need to find ways for these experienced employees to effectively transfer knowledge to their replacements before they retire so time is not wasted constantly sifting through policies and procedures.  Mentoring and phased-retirement programs may be a couple of ways to accomplish this.

Promote benefits using language that connects with the younger generation.

One sentiment I hear over and over again from government management teams is the concern that they are unable to attract quality people with salaries that can compete with those found in the private sector.  However, they do believe they can use a total compensation approach that emphasizes benefits.  One key weapon that LAGERS-participating employers have at their disposal is a well-run defined benefit pension plan, something that is very rare these days in the private sector.  The key is to promote the pension using language that will resonate with the younger crowd.  A young job-seeker may not be all that interested in a “pension” but they most likely would respond well to “secure monthly lifetime income during retirement.”  Another term that resonates with people of all ages, but especially Millennials is “financial independence.”  Who wouldn’t want benefits that promote peace of mind and security?

The upcoming transition of seeing Baby Boomers off into retirement and welcoming the next generation of workers is exciting and nerve-racking at the same time.  But it can be planned for and, if handled appropriately, can propel government organizations toward future success by focusing on culture, effectively transferring knowledge and talking about benefits the right way.

 

Jeff Kempker Manager of Member Services

Jeff Kempker
Manager of Member Services

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Here are My Top Retirement Stories for the Month

 

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I have several retirement articles come across my desk every month. Below are a few that caught my eye…

Public Pensions Provide Retirement Income and Portability

You may come across articles that feature pensions in a negative manner and they may have quite a bit of misinformation. The National Institute for Retirement (NIRS) was recently featured in a Plansponsor magazine article that accurately illustrated some of the strong features of public pension systems. There should be more articles like this one to ensure everyone understands that the vast majority of pensions are doing things right, LAGERS included. Check out the article and the full report findings here.

Time to rethink the retirement paradigm

I found this article to be a very interesting new approach to retirement. Instead of the traditional thought of retirement where someone goes directly from working a full-time job to retirement, this article shows a gradual approach to retirement. This approach is becoming more and more popular among retirees and may be retirement of the future. Check out the article here.

What Americans get wrong about retirement, and what they fear.

There are many misconceptions out there about retirement and expectations of retirees. This article reports on some of the finding from a Society of Actuaries study. It shows that a majority of retirees believe they are not going to live nearly as long as actuaries project them to live. Also, about two-thirds of retirees expressed concern of outliving their savings in retirement. As a LAGERS member, your benefit will be paid until you pass away. So, there is no way to outlive your benefit. Click Here for more findings from the study.

3 General Concerns that Thwart Retirement Saving

This article is a great example of how and why people are not saving for retirement. Overall, the technicality, complicated nature, and distrust in the industry are the three items mentioned in the article as the concerns that thwart retirement savings. The approach of the article is for financial representatives in the industry and what they can do to encourage increasing retirement savings. There have been many studies performed that show Americans are not properly saving for retirement. However, as a LAGERS member, your benefit gets larger the longer you work and the more you make in salary, no matter how much you save. Yet, saving is still very important part of your retirement puzzle, because your LAGERS pension is not intended to replace all of your income. Instead, it is intended to give a fixed piece. So, make sure you properly save to fill in the gaps between your Social Security benefit and your LAGERS benefit. Click Here to read this article.

It is very important that you keep yourself informed about the happenings in the retirement industry. This includes information about pensions. I hope this blog post gives you a more complete picture of the retirement industry. Of course, if you have questions about these topics or any other issues, please contact the LAGERS office!

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Jeff Pabst, CRC Senior Communications Specialist

 

 

When it Comes to Your LAGERS Benefit, You Can Take it With You

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One of the greatest misconceptions when it comes to your LAGERS benefit is that in order to be eligible for a monthly benefit, you must stay with your employer until you retire. The truth is, your benefit is more portable than you may think, and regardless of whether you plan to be a career-long local government employee in Missouri, or if you have plans to move on in the future, you have lots of different options when it comes to taking your LAGERS benefit with you!

I’m planning to move from one LAGERS employer to another

If you are planning on moving directly from one LAGERS employer to another, there’s not much you need to do when it comes to your LAGERS benefit. Your new employer will simply complete a new enrollment for you, which will create a separate LAGERS account, and you will continue to accrue service toward your future monthly benefit.  Just keep in mind that while your service will continue to accrue, your final benefit will be separated by employer and calculated at each employer’s respective benefit elections.

I’m leaving the LAGERS system, but may come back in the future.

If you are leaving the LAGERS system, but plan to return in the future, you can simply leave your LAGERS benefit untouched and when you reemploy in the future, you will simply pick back up where you left off. If you are not vested when you terminate the first time, just make sure that you reemploy within ten years to preserve your past service.  If you elect to take a refund or payout when you terminate, you are forfeiting that service in the future and if you do reemploy, you will begin again with zero service.

While you are between LAGERS employers, you can participate in whatever retirement plan your employer offers and it can work in tandem with LAGERS upon retirement. If your employer does not offer a retirement plan, and they are a public employer in the state of Missouri, you can actually purchase that time towards your LAGERS benefit if you reemploy with the LAGERS system in the future!

I’m leaving the LAGERS system, and don’t plan to ever work for another LAGERS employer.

While some public workers will remain in public service in Missouri for their entire careers, others choose at some point to move on, whether it be out of state or simply out of the public sector. When this happens, there are several options when it comes to an accrued LAGERS benefit.  If you have less than five years of service in LAGERS when you leave, you can take your member contributions (if you have any), plus interest, with you by applying for a refund.  If you were vested when you left, but have less than ten years of LAGERS service and you are more than 10 years from your normal retirement age, you can also apply for a lump sum payout of your benefit.  You can roll this payment into any new retirement plan at your new employer or you can simply take the payment directly.  This is a great option for members who have smaller benefit accruals in LAGERS and wish to completely transfer their benefit into a new plan.  You also have the options to simply let your LAGERS benefit sit with LAGERS and begin your monthly benefit at retirement age in addition to any other retirement benefits you earn at future employers.

If you ever do leave employment with your LAGERS employer, just remember that there are many options that provide flexibility in how you choose to take your LAGERS benefit with you. If you have any questions about your options, please do not hesitate to give our office a call.

Elizabeth Althoff Communications Specialist

Elizabeth Althoff
Communications Specialist

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Did You Know About These Education Tools?

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One of the primary responsibilities of your LAGERS retirement system is to ensure its members are properly educated about their retirement benefits. Because of this responsibility, there are several different educational avenues for you to receive information about your LAGERS benefits. Below are some of the excellent opportunities available to you.

Live Webinars. LAGERS has several live webinar events every month. Each of the webinars has a different focus on various topics. Some of the webinars may be more related to those who are nearing retirement. On the other hand, there are webinars that are specific to new employees and additional webinars that are focused on LAGERS’ employers. An attendee of a webinar can receive information about their retirement system without having to leave the comfort of their desk! Also, if you miss a live webinar, it may be available in our recorded webinar library. Click here to view the schedule for the upcoming live webinars!

Regional Pre-Retirement Seminars. LAGERS hosts regional pre-retirement seminars across the state every year. In 2017, there will be more than 35 seminars across the state and some regions will have multiple dates available to attend a seminar. If you are within 5 years of retirement, you will find a pre-retirement seminar to be beneficial as you prepare to retire. There are full-day seminars that include an in depth discussion about your LAGERS system, a presentation from the local Social Security Administration office and a Medicare presentation by Missouri CLAIM. However, we understand that you may not be able to attend an entire day session. So, we have abbreviated afternoon and evening sessions available in some regions of the state. These seminars are extremely beneficial and they don’t cost you anything to attend! So, attend a seminar and be sure to let you friends know they should attend one too. Click here to view remaining 2016 schedule.

Molagers.org. If you like to figure out information on your own, the LAGERS website is an excellent educational tool. Anything you could possibly want to know about your retirement system is on our website. The information includes eligibility, calculation, payment options and much, much more. Check out the LAGERS website here.

myLAGERS Portal. The myLAGERS portal is an excellent tool for your use. It give you access to your specific account information and gives you the ability to update your personal information, update your beneficiaries, generate benefit estimates, view previous annual statements and much more. The best part about this portal is the information is not generic. Instead it is specific to you and your working career at your employer(s). If you have used the portal before, you will need to enter your user name and password to re-enter the portal. If you have never used the portal before, you will need to complete the enrollment process by clicking the “Enroll Now” button. Click here to go to the myLAGERS log-in screen.

Social Media. Since you are reading this blog, you probably are aware of LAGERS’ social media presence. We have been on social media for a few years now and have been writing one blog per week for two years and counting! What we wish to accomplish through social media is to give you a daily update from your retirement system. These updates may be about the pensions on a national level or just different approach of how to interpret certain parts of your LAGERS benefits. Overall, our goal is to give you another means by which to receive information about your LAGERS system through a different lens.

These are some of the many learning opportunities you have at your disposal as a LAGERS member. Other opportunities include the Annual Meeting, printed publications, your annual statement and newsletters. Also, we offer employee meetings specific to your employer’s benefits, upon request from the employer. So, if you feel like you need more information about your LAGERS benefit, there are resources available to you and we are always available to help in any way possible, just let us know!

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Jeff Pabst, CRC Communications Specialist

 

 

Why It Doesn’t Matter What Your Employer is Paying for LAGERS Benefits (And Why it Does)

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Your employer recently received a report from LAGERS that shows how much they will need to pay for your retirement benefits beginning in 2017.  This report is not very exciting to the average person, however, the folks in your finance and payroll departments undoubtedly look forward to this report so they can fill in another line on your organization’s budget.

The cost of your LAGERS benefits fluctuates slightly each year based on things like payroll changes, personnel changes, and economic factors.  The amount your employer pays to LAGERS is different than other LAGERS employers because the cost is unique to your organization’s demographics and the benefits your board has chosen.  The cost doesn’t necessarily reflect the amount of your retirement benefit, so why would this matter to you at all?  Well, on one hand it doesn’t, on the other, it may matter a lot.

Why it doesn’t matter.

LAGERS is a defined benefit retirement plan, a traditional pension.  This means that your retirement benefit is determined using a formula that is driven by how long you work and how much salary you earn.  Your benefit is not based on an account balance nor is it determined by market forces beyond your control.  Your employer is not putting a percentage of your salary into some account with your name on it.  Rather, your employer makes monthly contributions to LAGERS to fund future monthly lifetime income for you and your co-workers.

If LAGERS adjusts your employer’s cost up, this does not mean you will receive a higher retirement benefit.  Likewise, if costs go down, your benefit amount does not decrease with it.  LAGERS benefits are always based upon a simple formula.

The cost for LAGERS benefits ebbs and flows but generally remains steady for long periods of time.  Your employer is required by Missouri state law to contribute the full amount in order to ensure your benefit will be there when you are ready.  LAGERS employers are extremely diligent in making these contributions because they understand the value of a secure retirement for you.

Why it does matter.

By now you are thinking, “OK, based on what I just read, I don’t need to care at all about what my employer is paying for LAGERS benefits because it’s no skin off my teeth anyway.”  But, if we take a bigger picture view of all of this, there are some compelling reasons why it does matter to you.

Over the past four years, many LAGERS employers have made upgrades in their retirement benefits.  Why?  Simple, their costs have decreased.  Often when this occurs, employers look to enhance benefits so that they may be more competitive in attracting and retaining good people to serve their community.  Why have rates gone down?  The majority of your benefit is funded by the investment return of LAGERS’ portfolio.  When we do well investing your money, your employer’s cost decreases.  When we don’t do as well, your employer’s cost may have to increase to make up the difference.  LAGERS has historically done well in the markets and the past four years were better than expected.  When the markets are performing well and employer costs are decreasing, this often triggers enhancements to your LAGERS or in other benefits.  That definitely matters to you.

Now with the markets going the other way and retirees living longer, your employer is most likely going to be asked to pay in a little more to LAGERS in 2017 to make sure your benefits are properly funded.  And they will, not only because law requires it, but because your future financial independence is vitally important.

Your LAGERS benefit is a significant investment by your employer and they take the funding of this benefit very seriously.  So do we.  While the cost of your benefit really doesn’t matter in the short term, it may matter a great deal to your overall financial security.

 

Jeff Kempker Manager of Member Services

Jeff Kempker
Manager of Member Services

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This Month’s Top Retirement Story Picks

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Every month, we see hundreds of retirement articles hit the news ranging from pension issues, to retirement plan design, to personal finance. Here are a few of my favorite headlines from this past month.

5 Financial Concepts To Teach Your Teen Before High School Graduation

I can’t remember how many times I listened to my parents lecture about financial responsibility when I was in high school, and now looking back, I am so grateful for their wisdom. As an adult, having the ability to understand and manage my personal finances, limit unnecessary debt, and make smart savings and investment choices not only allows me a more stress-free outlook on my family’s finances, but also gives me the ability to plan for my future retirement security in ways I may have otherwise not been able to. This article captures five great concepts that every young American should master in order to improve their future financial outlook.

http://www.forbes.com/sites/markavallone/2016/06/07/five-financial-concepts-your-teens-should-understand-before-high-school-graduation/#3281347c69c2

 

Employees Willing to Pay More for Retirement Benefits

With many Americans feeling unsure or unprepared for their retirement future, nearly 62% of employees in this survey said that they would be willing to pay more out their paychecks for more generous employer-sponsored retirement benefits. I hear very similar comments from many of our LAGERS members who say they would be willing to go from a 0% to a 4% personal contribution to LAGERS in exchange for a higher benefit multiplier.  The good news here is that employees are recognizing the need to save often and early.  Employers can use these conversations to help tailor a retirement plan that helps their employees feel like they are able to achieve their retirement goals.

http://www.plansponsor.com/Employees-Willing-to-Pay-More-for-Retirement-Benefits/

 

401(k)s ‘Not Suitable’ Retirement Income Vehicles

I recently read a survey that found many retirees prefer a guaranteed retirement income option over spending down assets. The great news when it comes to LAGERS is that all benefits at retirement provide a guaranteed lifetime income stream.  This article talks about some of the challenges traditional DC account holders face when trying to figure out their de-cumulation stagey while ensuring they don’t outlive their retirement savings.

http://www.plansponsor.com/401ks-Not-Suitable-Retirement-Income-Vehicles/

 

Teamster Retirees Win Surprise Victory, Force Government Not To Slash Their Pensions

This is a story that I have personally been following for some time now, as I’m sure many of our members have as well. It is scary to think that someone could work their entire career with the promise of pension income at the end, only to get there and have the terms of that agreement changed on you.  I believe that every hard working employee who dedicates their career to an employer should be able to retire with the peace of mind in knowing that their retirement benefit will always be there for them.  I am proud to work for LAGERS where our members and retirees know that their benefits are safeguarded by great plan design and strong funding policies.  I will continue to watch this story with interest and certainly hope for retirement security for every hardworking American today and into the future.

http://inthesetimes.com/working/entry/19179/teamster_retirees_win_surprise_victory_force_government_not_to_slash_their

 

10 Expensive Habits You Can, And Should, Break Today

I guarantee that you will find at least one habit on this fun list that you probably are guilty of. I think I found four or five that I know I should be better about.  I love these little reality checks because it helps me to hold myself accountable for every single financial choice that I make each day…often ones that I otherwise make without thinking, and certainly choices that can add up big over time.

http://www.forbes.com/sites/nancyanderson/2016/06/22/10-money-habits-you-need-to-break-today/2/#4c1261001ef6

 

Elizabeth Althoff Communications Specialist

Elizabeth Althoff
Communications Specialist

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