Monthly Archives: September 2016

The Significance of Your LAGERS COLA Benefit is Larger Than You Think . . .

This year LAGERS retirees will receive a COLA (Cost of Living Adjustment) of around 1%. This increase will be reflected on October 1st and it means much more than just a slight increase to your monthly benefit. It shows the strength and overall financial security of your LAGERS pension system.

By now you know you’re rather fortunate to have a defined benefit pension plan as the foundation of your financial future. As a retired local government employee, LAGERS provides you with an exceptionally strong and secure pension plan. However, the added stability of your COLA is also something to be thankful for. More and more, we find other pension plans are not able to provide this to their retirees, ever, much less on a yearly basis, as LAGERS has historically been able to do. This means as time goes on; your benefit keeps pace with the economy and spending levels on goods and services, and won’t lose value every year.

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Source:NRTA Pension Education Toolkit

“LAGERS cost of living adjustments are granted annually based upon the retirees date of retirement and applicable changes in the ‘consumer price index’ (CPI). Though this process may seem unnecessarily complex, I am extremely proud to share that 100% of LAGERS retirees have received increases equal to the CPI thereby maintaining 100% purchasing power in retirement,” says Keith Hughes, Executive Secretary.

Below are some things to understand about the benefit of having a COLA with your LAGERS benefit:

  •  It is based on inflation and the consumer price index and is designed to keep your benefit at 100% purchasing power.
  • The LAGERS board meets annually to determine the COLA adjustment based on the financial solvency of the system. The COLA is not an automatic benefit, but don’t worry, LAGERS is fiscally sound and even though it isn’t automatic every year, LAGERS has historically been able to provide this to retirees consistently. In order to continue to keep benefits at a high level of strength and security for years to come the COLA will never be over 4% in a year. However, if the CPI is higher than 4% in any given year, this will be considered and additional increases will be given in future years to “catch up”.
  •  The LAGERS plan is exceedingly stronger than other plans of similar nature – Without going into the weeds on the specifics, just know that the fund we use only for paying our retirees’ benefits is slightly over 100% funded. Yes, you read that right. Overall, LAGERS is around 94% funded when the industry average for similar plans is around 73%. This means LAGERS is in a better position to meet all of our obligations to retirees for decades to come.
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Source: NRTA Pension Education Toolkit

To give you a real life example of the power of having a COLA, the oldest of our members currently receiving a retirement benefit is 107. She retired in 1979 at the age of 70 and is currently receiving more than three times her original base benefit with accumulated COLA’s applied.
While this is obviously an extreme case, as we won’t all live to 107, it does show the significance of your COLA and how it affects your purchasing power in a positive fashion.

More good news, right? Keeping your benefit at pace with inflation is significant, especially when looked at over the lifetime of a retirement. So while the annual number may look insignificant, now you know that over time it matters much more than at first glance.
ALL retirees will receive a paystub in October showing your individual increase.

 

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September Article Roundup

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It seems like we are constantly hearing things like, “age 60 is the new 40,” and “age is just a number.” There is also a changing view of retirement from a period of leisure to more of a phased approach, where people aren’t stopping work altogether, but just scaling back or starting something new. Does this mean retirement is now a dirty word? Are the days of celebrating retirement over?

Read “When did retirement become a dirty word?”

 

Talking to a financial advisor is a great way to stay on track with your goals. Wading through the investment and benefits waters can be overwhelming if you try to go-it-alone. Financial advisors can be great resources, but there are some things you need to know before deciding who to trust with your fiscal future.

Read “10 Questions to Ask Before You Hire a Financial Advisor”

 

The American retirement savings crisis is well documented. About half of US workers don’t have access to employer-sponsored retirement plans and those that do, for the most part, are not saving enough. The Americans who have the steepest hill to climb are those that probably need the most help – those with lower levels of education.

Read “Workers without college degrees fare worse with 401(k)s”

 

The National Institute on Retirement Security released a report last week that shows the profound economic impact of public pensions in the U.S. Public pensions, like LAGERS, pay retirees steady monthly income. That income is not stuffed under mattresses, but put to use purchasing local goods and services. LAGERS, for example, pays over $250 million per year to retirees – $230 million stays in Missouri! The full report and state-by-state information can be viewed here.

Read “Pension Spending 7.1 million jobs, $1.2 Trillion Economic Output across the U.S.”

 

Jeff Kempker Manager of Member Services

Jeff Kempker
Manager of Member Services

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My Vesting Milestone

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Yesterday was a big day for me. It’s the day I became a vested member in the LAGERS system. Reaching this important milestone on the road to retirement has been an easy one for me. It’s been easy because I truly love my job, the wonderful relationships I have established with my co-workers and our members and to be part of such a great organization. To be part of something that is bigger than me, that positively impacts people every day, is so rewarding. Here are the top three things that I think makes your and my retirement system great!

 

1.  LAGERS is Innovative.  The year before I began working at LAGERS, we had just introduced our online reporting system, ECLIPSE. It was developed to not only integrate the different systems we were previously utilizing, but to also make the process of working with LAGERS more streamlined for employers and members. It ensures that anything from a benefit being calculated to the monthly contribution amount due is completed efficiently and accurately. We have even had other retirements systems across the nation inquire on setting up a system similar to ECLIPSE.
2.  LAGERS is Member Focused. We are constantly seeking methods to improve how we educate and communicate with our members. We are currently working on a responsive website, have redesigned our forms, launched the myLAGERS member web portal, began providing training and informational webinars and even introduced our blog you’re reading now. For our retired members, we also have Link Meetings, where you can come receive updates on your LAGERS system and connect with other retired LAGERS members.
3. LAGERS Gets it Right. It is our motto. When you call or meet one of us at an event, you will be speaking with someone who has taken the necessary steps to assure that not only are we measuring up to our financial obligations but also our service to our members. We strive to provide great customer service because we hire people who care about you. Everything we do affects our members so we consistently strive to get it right.
Remember this is your retirement system! If there is something that you feel could make us better, please do not hesitate to reach out to us to let us know. We are here for you, not just now, but for many years to come.

 

Dennise Schaben Accounts Analyst

Dennise Schaben
Accounts Analyst

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Why You Should Attend the Annual Meeting

Annual Meeting Picture

There has been quite a lot of hustle and bustle around the LAGERS office in preparation for the 49th LAGERS annual meeting. Every year it seems like I get several calls from people who have never attended the Annual Meeting with the same question, why should I attend the Annual Meeting?  There are many reasons to attend the Annual Meeting and here are just a few.

  • Well-Rounded Sessions. Over the past several years, our membership has expressed their desire for more educational sessions at the Annual Meeting. Your wish is our command. This year’s meeting will have a day of breakout sessions and a second day of system updates. Some of the topics will be more member focused including discussions about payment options and post-retirement issues. Additionally, there will be sessions that are designed for finance and human resources attendees. Finally, updates  about system changes, investments, and legislative changes will be provided.
  • Great Networking Opportunity. LAGERS members from every corner of the state attend the LAGERS Annual Meeting. This creates a great opportunity for you to meet and network with some of your local government colleagues. Use this time to get to know some of your fellow public servants and bounce ideas of one another.
  • Meet LAGERS Staff and Board. LAGERS Executive Staff and many others will be in attendance at the LAGERS Annual Meeting. This is a great opportunity to meet with the staff and ask them questions about your LAGERS benefits. This year, there will be a LAGERS benefit specialist available to ask questions about your specific benefit and generate a benefit estimate for you. Additionally, this is your opportunity to speak with the LAGERS Board of Trustees. The Board of Trustees is tasked with directing the LAGERS system for future generations. So, this is your opportunity to make suggestions and discuss the future direction of the LAGERS system.
  • Your voice, Your system. The primary reason your LAGERS system hosts an Annual Meeting is for Board of Trustee elections. This is your chance to have a significant impact on the future direction of your LAGERS system. Each LAGERS employer can send one employer delegate and one member delegate that can participate in the trustee elections. Many employers may not want to go through the hassle of nominating an employer delegate and electing a member delegate, but it is crucial that members and employers are given the opportunity to participate in the election. So, let your voice be heard and participate in the Board of Trustee elections!

These are a few of the top reasons why people enjoy attending the LAGERS Annual Meeting. This year, the meeting will be held in Springfield, Missouri at the University Plaza Hotel. Registration is open! Click here for more information!

JPabst - reduced size

Jeff Pabst, CRC Communications Specialist

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