Monthly Archives: February 2015

The Top 5 Reasons You Should Attend a LAGERS Pre-Retirement Seminar

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Are you a LAGERS member nearing retirement? If so, you need to attend a LAGERS pre-retirement seminar at least once before you retire. Below are the top 5 reasons you should attend a seminar.

1. The information you will receive will be beneficial to your retirement planning.

LAGERS pre-retirement seminars are designed to give attendees a ‘crash course’ on everything they need to know regarding their LAGERS benefit. The sessions start with a high level discussion about the retirement plan and as the sessions progress, the topics become more detailed. When all is said and done, an attendee should have a more comfortable understanding of the decisions they will be making when completing the retirement process with the LAGERS system.

2.  LAGERS Pre-Retirement Seminars are in your area!

You won’t have to travel far to attend a seminar because your LAGERS system hosts 20+ pre-retirement seminars across the State of Missouri. Some of the seminars are full day seminars and others are shortened evening or afternoon seminars.

3.  Your spouse is welcome to attend with you.

The decisions you will be making may affect your spouse. So, your spouse is welcome to attend a seminar with you. That way, you both have an understanding of your benefits and you will have a second person with whom to discuss the information.

4.  There will also be a Social Security presentation.

Many of our members are also eligible for Social Security benefits. So, at LAGERS full day pre-retirement seminars, the LAGERS system invites a representative from the Social Security Office to come and speak with you about your potential benefits. During this session, you will have the opportunity to learn about another source of retirement income.

5.  LAGERS pre-retirement seminars are free.

Believe it or not, you are able to attend a very informative pre-retirement seminar with no cost to you! As part of LAGERS mission statement we are working to provide superior service and we hope to do so through our free seminars.

So, if you or some of your co-workers are nearing retirement and have some questions about your LAGERS retirement system, attend a LAGERS pre-retirement seminar in your area!

Click Here for more information about our seminars!

I hope to see you soon!

Jeff Pabst, CRC Public Relations Specialist

Jeff Pabst, CRC
Public Relations Specialist

PENSIONS MATTER: WHAT’S GOOD FOR THE EMPLOYEE IS GOOD FOR THE EMPLOYER

Portrait of happy leader with touchpad looking at camera in work

 

There is no doubt that retirement is a serious financial concern among Americans.  Savings rates are low, financial literacy is lagging, and only half of workers in the private sector have access to a retirement plan through their employer.

But should an employer take any responsibility for their employees’ retirement security?  Wouldn’t it be easier to simply pay an employee a salary and let them save for retirement on their own?  Well of course, this is the easy route.  But employers who don’t realize the benefits of offering a pension plan for their employees are truly missing out on all of the wonderful advantages.

Consider this:  aging is inevitable.  And at some point, age-related factors will contribute to a decline in productivity.  When an employee’s productivity is not equal to his compensation due to age-related factors, then what?

If his employer has not provided a well-structured pension plan, the options include:

  • Firing of the employee.
  • Demoting the employee.
  • Retaining the employee at the same salary and position and absorbing the productivity losses.

Firing or demoting senior employees will not contribute to a harmonious work environment and there are real costs to an employer when employees remain on the job past their optimum productivity age.  Health care costs, increased sick leave, workers’ compensation claims, and productivity losses all mount up with an aging workforce.

And let’s not forget the intangible costs.  Younger, talented workers, the ones the employer strives so desperately to retain, will become frustrated by the lack of upward advancement opportunities and move on to greener pastures.  This ultimately leads to a lack of innovation.  A workforce that does not replenish itself with new people to spawn new ideas runs the risk of living in the past.

Industry experts are starting to take notice of these trends. E. Heather Smiley, Chief Marketing Officer at MassMutual Retirement Services in Springfield, Massachusetts said is a recent article, “What we are starting to hear is, ‘I’ll retire when I’m unemployable.’ That very clearly articulates a shift from the feeling that you have control over those decisions, to saying, ‘I’m going to keep going until I can’t go any longer.’”

Not only are many workers feeling as though they have no control over when they can retire, but employers without pension plans cannot predict employee retirement patterns either.

Pensions matter to employees and employers because they can:

  • Attract quality workers.
  • Allow employees a dignified exit from the workforce.
  • Increase morale and productivity.
  • Reduce costs created by retaining less productive workers.
  • Keep lines of promotion open so younger employees are encouraged to stay.

Pension plans like LAGERS help employers achieve these goals.  LAGERS-participating employers are responsible for building and sustaining local communities in every corner of Missouri.  This responsibility requires dedicated, experienced workers to get the job done.  It also requires internal workforce mobility and innovation to best serve the needs of our hometowns.

Pensions matter to the people living in these communities because the services provided by experienced workers trickles down the citizens.  Then, as the local public servants retire, they overwhelmingly remain in their hometowns and use their pension checks to purchase goods and services that help sustain the local economy.  In fact, LAGERS paid $230 million in pension benefits last year, 94% of which stayed in Missouri.

Pensions, like LAGERS, are not just getting it right for the workers, but for the employers and taxpayers as well.

 

Jeff Kempker, RPA, CRC

Jeff Kempker
Manager of Member Services

5 Reasons to Love Your LAGERS

bigstock-Love-Birds-on-a-branch-56002589It’s an easy thing to do: forget about your LAGERS benefit. With all the hustle and bustle of our busy lives, your LAGERS benefit may be something you don’t think about very often; maybe it’s no more than a glance at your member statement once a year. With all the love in the air this week, I thought we’d talk about some of the reasons why your LAGERS benefit is worth thinking about a little more often. So whether or not you’re cuddled up with your sweetheart this Valentine’s day, don’t forget to give your LAGERS benefit a little love too! Here are my top five reasons on why you should love your LAGERS!

1. Your hard work is rewarded.

It’s the most basic principle by which your benefit is calculated: the longer you work, the greater your benefit is going to be when you retire. It seems simple enough, but have you ever really thought about how cool that is? Having LAGERS means knowing that if you work hard you entire career, you will have a protected, secure retirement benefit that will always be there for you when you retire.

 2. You don’t have to worry about ‘rebalancing’ your portfolio.

I’ve read studies that found over 50% of Americans cannot pass a basic financial literacy test. That’s a pretty staggering statistic considering those same folks are still responsible for financially managing their retirement…and there’s no consolation prize for getting your retirement plan wrong (unless you really like to work). Fortunately, your LAGERS benefit eliminates the need for every individual LAGERS member to be an expert investor. LAGERS members and employers make their monthly contributions to LAGERS and our team of professional investors do the rest, no rebalancing required!

3. Protection from market fluctuations means more now than ever before.

I’ll be the first to admit it; I work in the retirement industry and am surrounded by some great investment minds, but managing my own retirement portfolio sometimes still feels a bit scary. For me, it’s the fear of the unknown; not knowing how long I’m going to live, not knowing what the markets are going to look like in twenty years, not knowing how much I will actually need in retirement. With your LAGERS benefit, you have the peace of mind of knowing that you can count on a guaranteed monthly payment no matter what happens, no matter what the markets do (or don’t do), no matter if you live longer that you expected, or die sooner and leave a spouse behind. Knowing you’re insulated from some of these market and longevity risks should definitely help you sleep better at night.

 4. Inflation won’t threaten your LAGERS retirement.

Here’s another one of those risks that you have to plan for in retirement. Things get more expensive all the time, and as the cost of goods and services increase, your income has to keep pace. For LAGERS retirees, Cost of Living Adjustments (COLAs) help insure that inflation isn’t eating into the purchasing power of their monthly benefit. In fact, 100% of LAGERS retirees and beneficiaries have 100% purchasing power with their benefits today! It’s one less thing to worry about.

5. Survivor and disability benefits are part of the deal.

This is an easy one to forget about, but I can’t overstate how cool it is that these benefits are part of the deal. LAGERS benefits are designed to insure that you and those who are financially dependent on you will have a guaranteed source of income, not just when you retire, but also in the event that you were to become permanently disabled or pass away before you retire. I’m reminded of a member who had worked for his employer for years prior to them joining LAGERS. The day after his employer added LAGERS benefits, he tragically passed away in an accident. What a difference a day can make; since he was a LAGERS member, his spouse is now receiving a lifetime benefit based on her husband’s earned service; a benefit that she would otherwise not had. And while we hope you never have to use these benefits, it sure is nice to know they’re there.

There are a lot of great reasons to love your LAGERS, and although it’s easy for forget about your retirement benefits, especially the further away from retirement you are, try to keep in mind what an awesome thing it is to have!

Elizabeth Althoff Public Relations Specialist

Elizabeth Althoff
Public Relations Specialist

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A View of 2014 and 2015 From LAGERS Director

For LAGERS, calendar year 2014 will always be remembered as a year that the system made progress in achieving our mission. The stated Mission Statement is: “To provide secure retirement, survivors’, and disability benefits to members and beneficiaries in the most efficient and economical manner possible, while providing superior service and fulfilling its fiduciary obligations.” And this progress was achieved through an improved focus, through the lens of the membership. If an activity does not directly improve the retirement system for the membership and their employers, it does not get attention. This keen focus makes LAGERS a preferred provider of retirement benefits for members, retirees, employers and taxpayers in Missouri. The LAGERS Board and staff are privileged to hear the membership attesting that the services provided are ‘top notch’ and sufficiently varied to meet the needs of all stakeholders. It is these continual efforts that result in LAGERS frequently being named as the Missouri retirement system that is “Getting it Right” for all stakeholders.

The LAGERS Board of Trustees continues to focus on governance of the system. The Board adopted a formal Actuarial Funding Policy, with a targeted funding ratio of 100%, to ensure the systematic accumulation of assets to pay future benefits. Also, the Board approved an updated Statement of Investment Policy & Objectives permitting the investment staff latitude to pursue investment opportunities, within certain broad guidelines, and promptly report such activities to the Board. These two policies are integral in ensuring that LAGERS operates in the most economical manner possible. At the request of LAGERS employers, the system pursued legislation permitting LAGERS to administer legacy pension plans for employers that placed newly hired employees in LAGERS. This legislation was voluntary in nature to the employer and permitted the legacy plans to seek a more efficient administrative option. This legislation was passed by the Missouri General Assembly and subsequently vetoed by Governor Nixon. These key actions are representative of the board fulfilling their fiduciary obligations to all stakeholders of the system.

For the fifth consecutive year, LAGERS Funding Progress continues to increase with a 2014 prefunded ratio of 91.7%. This is the ratio of assets versus liabilities at a particular measurement date, February 2014. Looking at a more granular level, 36% of the participating employer groups have Funding Levels greater than 100%. And as expected, with 146 new employers in the last decade many newly covered groups are making progress in their funded status. LAGERS continues to provide modest retirement benefits with the average retiree receiving $931 a month. In fact, 94% of the $231 million LAGERS paid in annual benefits in 2014 went to Missouri residents that support the local Missouri economy.

LAGERS investment portfolio continues to post top quartile performance with a one-year return of 6.9% net of fees for the year ending December 31, 2014. Further, looking through the longer-term perspective, the ten-year return of 7.6% and the twenty-year return of 9.2%, exceed the assumed investment return of 7.25%.  The Board’s forward thinking governance model exemplified in the Investment Policy continues to deliver superior results. These long-term investment results are evidence that today’s retirement cost are not being passed on to future generations of taxpayers as acclaimed in the popular press but are one further example of the efficient manner that the Board and staff are “Getting it Right” for ALL stakeholders.

The LAGERS website has become the portal to various retirement related communications. In a society that expects 24/7 access to financial data, that is exactly what LAGERS website is delivering and in a variety of different formats. The LAGERS member web portal provides 24/7 access to member’s personal data and over 1 in 4 members (13,000 +) are currently enrolled users. In 2014, those members have run 4,000 personal retirement estimates at their own leisure using current LAGERS data. For those members that are more engaged in social media; the website provides access to Facebook, Twitter, YouTube, and the LAGERS weekly blog. The varied communication formats are just a sample of the superior service provided to the membership providing differing methods for employees to engage in their own personal retirement planning.

As noted in the 2014 review, LAGERS Board and staff endeavor daily to implement the system’s Mission Statement in providing secure retirement benefits to the membership. The numerous examples above site the various ways the system is “Getting it Right” for all stakeholders.

2015 Looking Forward

The 2015 legislative session of the Missouri General Assembly will again consider a bill pertaining to LAGERS administration of legacy pension plans. The bill will likely be very similar to the 2014 legislative proposal with a couple of small modifications to address concerns in Governor Nixon’s veto message. This legislation aligns with LAGERS core business function of providing pensions to local governments and will be pursued again at the request of many LAGERS employer’s seeking this legislative solution.

The system’s financial strength is further exemplified through reductions in employer contribution rates, where 3 out 4 employer contribution rates are staying the same or will be declining during 2015. The system fully expects this trend of lower contribution rates to continue for the next couple of years. This pension contribution relief is greatly appreciated by not only the employers of the system, but the taxpayers in our valued communities as well.

Member education continues to be an emphasis of LAGERS. Specifically, 2015 will include 21 Pre-Retirement Seminars for those members approaching retirement. These seminars are extremely helpful to those approaching retirement and should be mandatory prior to stepping into retirement. In addition, LAGERS staff will be hosting 7 Retiree Link Meetings that are the system’s first retiree focused seminars. Staff trusts that these sessions will permit retirees to renew old friendships and gather current information on their retirement system thereby permitting these individuals to be engaged ambassadors of LAGERS.

Many in the press would have you believe that a secure retirement is no longer available. For those members participating in LAGERS, you know different. LAGERS has a consistent pattern of delivering promised benefits that makes LAGERS a preferred provider of retirement benefits for members, retirees, employers and taxpayers of Missouri local governments. A fully funded retirement plan is attainable and is the focus of your Board and staff.

Keith Hughes, Executive Secretary

Keith Hughes, Executive Secretary

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