LAGERS Begins Administration of First Legacy Plan

A first big step for LAGERS took place this week as the system officially took over administration of the City of Jefferson’s Fire Pension Plan – the 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.”

June Article Roundup

What To Do When You Haven’t Saved Enough For Retirement

The good news is that a portion of your retirement income will be covered by protected, monthly, lifetime payments you earned from your LAGERS service. The bad news is that your LAGERS benefit likely won’t be enough to produce the lifestyle you want in retirement. This article gives some helpful tips on catching up on retirement savings.

Read the article here.

 

Here’s how thieves use your data after a breach

Hearing LAGERS IT guy talk about all of the cyber security threats we face today is enough to make you never want to use the internet again. This article breaks down how cyber criminals use your information if they are able to hack into an online database and how to protect yourself against these threats.

Read the article here.

 

How to Spot the Lies Financial Advisors Tell

I am a huge proponent of seeking financial advice to help you navigate retirement savings and other investments. However, I am just as passionate about warning people to be very careful on who they choose as their financial advisor. This article will give you some ammo for selecting and advisor or to identify when you’re current advisor is not working in your best interest.

Read the article here.

 

Jeff Kempker
Asst. Director, Member Services

Tagged , , , , ,

Just in Case – Disability and Survivor Benefits

It’s summer, and a lot of our members are out taking advantage of the nice weather getting things done in our streets, parks and other places in our community. Working out in the field brings with it a different set of risks for local government employees. A little known fact about LAGERS – we have survivor and disability benefits available to you as a LAGERS member!

What does this mean? Well, call it your “Just in Case” provision.

Let’s hope you don’t have to use them but the benefit is there if you do. Whether your on the clock or off work, these benefits work for you should you have an accident, or worse.

Our communications specialist Elizabeth Althoff explains these benefits in greater detail in this short video.

MY LAGERS EXPERIENCE: A Reflection on Three Remarkable Decades

Keith_Hughes_180

Keith Hughes, Executive Director

Wow, I find myself repeating a question that I’ve heard uttered countless times at Pre-Retirement Seminars during my career: “Where did the last 30 years go?”

In the summer of 1987, I became the first Comptroller of the LAGERS system. Just like many of you, I was recruited because of an existing skillset I obtained through previous employment. Having worked at the Missouri State Auditor’s Office and Joint Committee on Public Employee Retirement, I felt well prepared to handle the task.

“Where did the last 30 years go?”

After two short years with LAGERS, my responsibilities dramatically changed when I was promoted to Assistant Executive Secretary/Comptroller. This fortuitous move forever changed my view of retirement. For it was in this position that I begin meeting with government employees with similar interest of mine. They simply wanted to go to work daily, provide superior services to their employer, and create a better community for their families. In this role, I regularly met with members of the system in an effort to identify and secure monthly pension benefits. At the time, I was not prepared for this position, which included frequent public speaking, but knew that 22,000 members were depending on the staff of eight to meet their financial retirement goals.

IMG_1804CroppedResized

Keith being a good sport accepting his caricature from LAGERS’ Board Chairman, Arby Todd, at Keith’s retirement celebration.

In pursuit of further pension education, I came to the realization that LAGERS’ benefit structure, investment allocation, and member service design was superior to many other public pension plans across America. LAGERS has always been promoted as meeting one of three financial legs of a retirement solution; with the other two supporting legs being Social Security and personal savings. When I view these three sources of retirement income, clearly LAGERS is BEST positioned to deliver benefits for the long-term.

The LAGERS Board of Trustees has done an excellent job of ‘right-sizing’ the solution for the membership. In the 1980’s many of the services provided for the membership were completed through third party vendors. As the system has grown in size and complexity, many of these same services have been absorbed by LAGERS professional staff. As indicated by the system Mission Statement, the Board and staff are always seeking the most efficient and economical solution available. An example of the changing technology was the implementation of the LAGERS web portal ‘ECLIPSE’ which provides access to LAGERS employers and member data, 24 hours a day/ 7 days a week. This is a dramatic change from the monthly paper reporting of the 1980’s.

“It has truly been my privilege to serve the LAGERS membership for the last thirty years.”

In the winter of 2010, I was named the fifth Director of LAGERS. With a little over 40 years in existence, LAGERS had grown to be the third largest public pension plan in Missouri and the largest system serving local government. In an effort to extend LAGERS efficiencies to local governments, legislation was recently adopted permitting LAGERS administration of closed local pension plans. This optional program may relieve local governments of the daily burden of pension administration while leaving the task to LAGERS professional administration. This legislation is a “game changer” for local governments struggling to meet their fiduciary responsibility in managing local administered pension plans. Again, another fine example of the extension of pension services for local governments in Missouri.

LAGERS Board and staff continually focus on delivering superior service to the LAGERS membership. In 2015, LAGERS was named the “Public Plan Sponsor of the Year – Defined Benefit Category” by Plansponsor Magazine. This award was a further confirmation that LAGERS was “Getting it Right” for the membership. In addition, LAGERS has now received the GFOA ‘Certificate of Achievement for Excellence in Financial Reporting’ for 39 consecutive years. These two awards further support LAGERS meeting the membership needs and full reporting transparency. I am extremely proud of these two awards as they reflect the professionalism of the LAGERS staff I have the privilege to work with each and every day.

IMG_1782

LAGERS received the 2015 Plan Sponsor of the Year award.

In reflection, there has been one consistency in my LAGERS experience. That one consistency is that each and every action taken by the Board of Trustees and staff is to deliver superior service in the most economical manner. A very simple pursuit, but one worth the effort for the 700 employers and 62,000 plus members served today.

It has truly been my privilege to serve the LAGERS membership for the last thirty years. The system continues moving forward with a strong governance structure led by the Board of Trustees and professional staff. And now at the 50th Anniversary of the system, LAGERS is identified as one of the ‘premier public pension plans’ in America.

 

 

 

What Are Your Plans?

Businessman Dreaming Of Retirement On A Beach.

I’m not big on audience participation.

I don’t like going to a concert and being expected to sing along (What did I pay you $100 a ticket for?), and I don’t like going to conferences and being expected to answer a bunch of questions (I usually go to conferences to get answers to questions). Don’t get me wrong, when I do pre-retirement seminars for LAGERS I want my audiences to speak up and ask a lot of questions because I’m there to provide answers to them for their retirement questions. However I do ask one question of them at each of the seminars that I do:

“What are your big retirement plans?”

You see, people are very happy to come to us and talk about their retirement. After all, who wouldn’t be excited about the next chapter of your life, being able to come and go as you please and not answer to anyone and be able to do what you’ve always wanted to do? So I always ask people to share with me what their dreams are for retirement.

I’ve heard some great answers so far. Here are a few –

“I’m moving out of the country, to Costa Rica. It’s very inexpensive to retire there.”

“I’m buying a motor home and touring the country to visit all the national parks.”

“I plan to get up after 9 am, have some coffee, go outside for a while, and then do nothing for the rest of the day!”

“My wife and I are going to move to an RV park and live there and work there as park attendants.”

“My grand kids and my new cows and baby calves. That’s all I plan to do!”

“I plan to bike the Appalacian Trail from one end to the other.”

bigstock--148462139

And I hope to hear many more of the wonderful stories that you all have about what you’re going to do next. For those of you planning to move away from your current location and see new surroundings, check out this fun quiz on where you’d like to live in retirement.

Keep dreaming folks. Retirement will be here for all of us faster than we think.

Angela

Angela Lechtenberg, Communication Specialist

It’s Official: The U.S. Retirement Crisis is Real

 

I have been aware of the retirement crisis in America for a while now. There are new articles published every week about Americans’ lack of savings, lack of access to retirement plans, and lack of financial knowledge. Combine that with the fact that defined benefit pension plans have all but been extinguished in the private sector, and anyone can see how this is going to turn out. Every once in while there is an article that claims the retirement is crisis is overblown, a farce, a fairy tale, like unicorns and bigfoot. But these articles are few and far between. There is little evidence that suggests we are all going to be OK and there are mountains of facts that say otherwise.

If there was ever, even more, reason to be concerned about the state of retirement security in America, there is a new report from the National Institute on Retirement Security (NIRS), Retirement Security 2017: A Roadmap for Policy Makers, that proves Americans are concerned and aware of the pending retirement bubble. I recently attended NIRS’ Retirement Policy Conference in Washington, D.C. where this study was released along with several presentations by experts all confirming that we are heading for crash if we don’t do something soon. Here are some of the takeaways from the report and the meeting.

“A secure retirement system is the key to economic security.”

 

Americans Agree There is a Problem

NIRS’ research finds that 76 percent of Americans are concerned about economic conditions affecting their ability to achieve a secure retirement and 88 percent agree that the U.S. is facing a retirement crisis. So it seems Americans are aware of the problem, but what about our elected officials? One of the speakers at the conference, U.S. Congressman Joseph Crowley (D-New York), is very aware of the retirement crisis and is taking steps to fix it. He said, “The American Dream is increasingly being put at risk,” and “A sound retirement system is the key to economic security.” However, Congressman Crowley noted during his remarks how hard it is to get his colleagues to pay attention to this issue. That is a sentiment that Americans share, based on NIRS study:

  • 85% says leaders in Washington do not understand how hard it is to prepare for retirement.
  • 86% say leaders in Washington need to give higher priority to ensuring Americans have a secure retirement.
  • 82% say government should make it easier for employers to offer pensions.

 

Americans Like Pensions

The NIRS study confirmed that Americans prefer pensions over 401(k)-type plans. Some 71 percent of Americans say that pensions do more to help workers achieve a secure retirement as compared to 401(k) plans and 85 percent say all workers should have access to a pension plan. The survey also found that 92 percent of Americans agree that pensions help recruit and retain good public sector workers to serve the citizens. “The public clearly supports retirement income for everybody,” Keith Brainard, Research Director for the National Association of State Retirement Administrators, said during the conference.

 

Most Americans Can’t Achieve Retirement Security on Their Own

National Institute on Retirement Security

The shift away from pensions in the private sector has forced workers to save for their retirement on their own. The problem with this is that the average American worker is not equipped to know how much to save, what to invest in, when to reallocate, and how to turn a retirement nest egg into lifetime income. Brian Perlman, the Senior Vice President, Financial Services Practice Lead at Greenwald and Associates, a full-service market research firm in Washington, D.C. said, “You can’t do it yourself. People cannot succeed [in retirement] on their own.” American workers agree, as the NIRS study found eight-out-of-ten Americans believe the average worker cannot save enough on their own to achieve a secure retirement and nine-out-of-ten say retirees don’t know enough about managing investments to make their savings last.

“You can’t do it yourself. People cannot succeed in retirement on their own.”

 

Americans Need Greater Access to Retirement Saving Vehicles

“People are more likely to save if you can do it through work,” said Gerri Madrid-Davis of AARP. Fifteen times more likely, in fact. The problem is that only about half of U.S. private-sector workers have access to a retirement plan provided by their employer and many workers that do have access choose not to save. Some states have tried to tackle this issue by setting up state-run funds that workers can put money into when their employer does not provide a plan. These state retirement savings vehicles seem like a great solution! But there is a problem, the U.S. Congress recently voted to restrict states from creating these funds by striking down the rule that allows these programs.

 

Conclusion: Why Does LAGERS Care About Any of This?

LAGERS members have will have a secure retirement benefit. Our retirees can rely on predictable monthly income that increases with inflation. The overwhelming majority of public sector workers still have pensions and the state-run retirement savings debate does not affect LAGERS in any way. So why do we care? It’s simple, our vision statement is “a secure retirement for all.” We support any reasonable initiative that will help realize that vision. At LAGERS, we are relentlessly pursuing our vision by protecting our members’ assets so they have peace of mind knowing a portion of the monthly income needed to sustain themselves during retirement will be paid as expected. And since we believe strongly that a well-managed defined benefit plan is the best way to improve retirement security, the more people we can get into our plan, the better off we all will be. That is why we also strive to carry our message to local governments that have not yet chosen LAGERS to encourage them to see if our services are a good fit to help their communities prosper.

We know we will never be able to achieve a secure retirement for all; that is why it is the perfect vision statement. It means we will never stop. We will never be finished. There will always be more work to be done.

 

Jeff Kempker
Manager of Member Services

Tagged , , , , ,

Let’s Break Down Retirement Security

“Retirement Security”… the phrase may bring up a lot of questions. Such as –

  • What does it mean?
  • How do I get it?
  • Does anybody really feel “secure” in retirement?

In today’s economy, retirement security can seem rather elusive to some. So we’ve created a very easy to understand video that explains it well. It starts by showing the old rule that you must save 10% of your income to have a secure retirement. But that is nowhere near close to the amount you need. In order to maintain your standard of living and have a quality retirement you need $20 for every $1 of income earned in your lifetime. It’s called the “Rule of 20.” This rule is a good threshold, but how do you get there?

Enter the old 3-Legged Stool of Retirement Security. Social Security, a strong pension like LAGERS, and other savings and investments each make up a leg of the stool. The three work together to create a lifetime of retirement security for you. Don’t take one of the legs away, or your stool becomes wobbly and unstable. Nobody wants a wobbly, unstable retirement!

Watch the video here to learn more.

 

 

Back by Popular Demand: The Extra LAGERS Benefits that You May Not Know You Have

When you think about your LAGERS benefit, probably the first words that come to mind are ‘retirement benefit.’ After all, Retirement System is in our name. But don’t forget that there is more to your benefit than the name may suggest; LAGERS also provides our members with disability and survivor’s benefits.

Don’t think your employer elected these benefits? Think again. Every LAGERS member is automatically covered by both disability and survivor’s benefits.

All LAGERS members are immediately entitled to duty-related disability and survivors benefits, and all vested members may also be eligible for benefits in the event of a non-duty related death or disability.

Because these benefits are designed to protect a member and those who are financially dependent on the member’s income from financial hardship in the event of a death or disability, a member (or beneficiary) that becomes eligible for one of these benefits receives monthly protected payments for his or her lifetime, plus any applicable cost of living adjustments.

The amount of benefit payable depends on what caused the death or disability. Duty related benefits are paid when a disability or death was caused by your job, and therefore generally pay a more robust benefit to make up the difference in years a member would have worked and continued to earn a benefit had he not become disabled or passed away. However, benefits to vested members may also be payable if the cause of death or disability happened off the job; the benefit then is based upon how much service the member had earned to date.

Here’s one more thing you should remember about these added benefits: make sure you have saved information regarding LAGERS disability/survivors benefits somewhere that is readily available for you and loved ones.

For example, put a LAGERS brochure or statement in with your life insurance policies. Members or spouses of members that becomes eligible for these benefits often find themselves in an unexpected situation. Making it as easy as possible to gather information regarding potential benefits can really help to reduce the stress of an already difficult experience. Even more importantly, simply ensuring that a spouse is aware that benefits may be payable should be an important part of your financial plan.

If you ever consider taking a job outside of the LAGERS system, there may still be some benefits payable on a vested account, but payments wouldn’t start until normal retirement age. It’s always a good idea when considering a change in employers to consider your entire benefit package, after all, not all retirement plans offer similar benefits. If a potential employer does not offer similar disability and survivor benefits, it may be worth considering purchasing supplemental insurance to make up the difference.

No one wants to ever find themselves disabled or leave a loved one behind who is unable to financially support themselves. With your LAGERS benefits, it’s one less worry. Visit our website to learn more about this great benefit!

Elizabeth Althoff
Communications Specialist

Top 5 Employer Reporting Tips

For some of our employers, the employer reporting process may seem like a foreign art that is yet to be mastered. Others may just need a quick refresher. Here are some helpful tips that I have put together based on my short experience as an Account Analyst for LAGERS.Employer Reporting Tips

  1. Enrolling employees at time of hire

New employees should be enrolled on our online reporting system, ECLIPSE, right away. Some employees may qualify for a six month period where no contributions are due. If the employee exhausted this period with another LAGERS employer, wage reporting begins immediately. You may view when an employee is due for wage reporting in your Free Six Month Schedule on ECLIPSE.

  1. Reporting payouts and wages

Keep in mind that lump sum payouts are only reportable to LAGERS if they are recurring. Many employers report lump sum payouts (for example: unused vacation, sick or comp time) with the employee’s final paycheck. This is only reportable if a lump sum payout of the same type of leave has been paid in the past or if the balance is paid out in regular payrolls to extend the employee’s termination date. Remember to report gross wages when they are paid, not earned.

  1. Checking the Statement of Account

The Statement of Account should be referenced after the monthly wage statement has been completed and submitted. It reflects the monthly contribution due along with any credits and/or amounts due as a result of corrections or adjustments. By checking this prior to making your monthly payment, it ensures that you are sending in the correct contributions.

  1. Making contribution payments online

Your agency has the option to pay monthly contributions online. Paying online is very secure, quick and easy. The set-up process in ECLIPSE is simple; all we need is bank account information. After the wage statement is complete, you initiate the payment amount and date by the click of a button. If you prefer to pay by check, please include a copy of the PDF from the Statement of Account to ensure your payment is credited to the proper account.

  1. Communicating with your Accounts Analyst

If you have a question, feel free to contact your Account Analyst. We are your best resource regarding employer reporting and are always happy to help.

You got this, happy reporting!

Miranda

Miranda Fishback, Accounts Analyst

 

 

May Article Round-Up

Millennials Saving for Financial Freedom, Not Retirement.

As a Millennial, I found this article to be interesting. According to a Bank of America Merrill Edge survey, “more than half of the millennial generation is saving for financial freedom or the ability to fund ‘living in the lifestyle they desire,” whereas more than half of Generation X and Baby Boomers are saving to leave the work force. According to the article, the majority of Millennials are saving to live in “the now” with disregard to whether or not they need to work longer. This is interesting, but not all that surprising to this writer. I think that if you were to ask someone from either older generation about what they were saving for in the 20’s and 30’s, it’s not likely that it was to leave the workforce in retirement.

http://www.plansponsor.com/Millennials-Saving-for-Financial-Freedom-Not-Retirement/

Happiness in Retirement is About More Than Account Balances.

Of course, when you think of your LAGERS retirement system, you are probably thinking about the finances and the affordability of retirement. However, there are many studies out there that have shown that retirement is not just about the finances. There is much more to it than your account balances. This article gives perspective from a Certified Financial Planner (CFP) that had some clients that retired and ended up depressed. The CFP goes on to say that those of us that identify strongly with our jobs have the hardest time transitioning from working to retirement. This article gives some really good insight on planning for the non-financial parts of retirement.

http://www.cnbc.com/2017/05/08/happiness-in-retirement-is-about-more-than-account-balances.html

5 Cheap or Free Ways to Improve Retirement Wellness.

Within the same line of thought as the previous article, this article gives you some cheap and even free ways to help you find wellness in retirement. The one that I found to be most intriguing is the last one on the list, volunteering. If you do not have the financial need of employment, but are someone who strongly identifies with your job, a great way of finding purpose in retirement is through volunteering. The best part about volunteering is that you get to pick the purpose you want to pursue! However, if you don’t want to volunteer, there are some other great suggestions in this article of how to achieve wellness in retirement.

http://www.benefitspro.com/2017/05/08/5-cheap-or-free-ways-to-improve-retirement-wellnes?page=2&slreturn=1495628843

5 Steps to Perfect Financial Health

Retirement is just one piece of your financial well-being. It is best to get yourself in the best financial position possible now so you potentially go into retirement with strong financial health. This article gives you some small tips to get you going in the right direction towards financial independence. Give it a read and think about implementing some of these to start going in the right direction.

https://www.fool.com/retirement/2017/05/22/5-steps-to-perfect-financial-health.aspx

JPabst (2)

Jeff Pabst, CRC 

 

%d bloggers like this: