Monthly Archives: July 2016

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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