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Missouri Department of Transportation & Missouri State Highway Patrol Employees’ Retirement System

Retirement FAQ

How do I start the retirement process?  What happens if I change my mind about retirement? What are my payment options? Below are the answers to the most frequent questions received by MPERS staff.

If you have a question you would like to see addressed, please send us a message at mpers@mpers.org.

BackDROP

How do I roll over my BackDROP distribution to the Missouri Deferred Compensation Plan?

In order to defer taxation, you can roll over your BackDROP to an IRA or eligible employer-sponsored retirement plan, including the Missouri Deferred Compensation Plan. Please note that rollovers to Roth IRAs are taxed in the year in which they are rolled over.

If electing to roll over your BackDROP, the BackDROP Distribution form requires that your financial institution complete the “Agreement of Bank, Financial Institution or Retirement Plan” section of the form. However, since MPERS works closely with Missouri Deferred Compensation, if you are rolling over your BackDROP to the Missouri Deferred Compensation Plan, you can check the “MO Deferred Compensation” box under the agreement section and send the form directly to MPERS. MPERS will then send the form to Missouri Deferred Compensation Plan on your behalf for completion of the agreement section.

Will I owe taxes on my BackDROP distribution?

If you elect to receive your BackDROP in cash (or partly in cash), then the amount that you receive in cash is reported as taxable income in the year in which you receive it.

MPERS is required to withhold 20% for federal tax from BackDROP distributions received as cash. MPERS does not withhold for state tax, although you may owe state tax on BackDROP distributions received as cash.

If you elect to receive your BackDROP in cash, an early distribution penalty of 10% may be assessed by the IRS if you are under age 59½ unless an exception applies. A notable exception as it pertains to MPERS is that if you separate service in the year in which you turn 55 or later, then you are exempt from the 10% early distribution penalty. Qualified public safety officers are exempt from the early distribution penalty on BackDROP distributions received as cash so long as they separate from service during the year in which they turn 50 or later.

BackDROP payments that are rolled over into qualified retirement accounts are not subject to the 20% withholding requirement nor subject to the 10% early distribution penalty until withdrawn from the receiving plan.

Beneficiary

Can someone other than a spouse be named as beneficiary for my retirement benefit?

Only the spouse of a member can be named as a beneficiary for the joint and 50% survivor or joint and 100% survivor benefit payment options.

Anyone can be named as a beneficiary for one of the guaranteed payment options (e.g., spouse, child, parent, friend, charity, etc.)

Do I need to complete the "Beneficiary Designation for Final Payment and Remaining Guaranteed Payments" section of the Retirement Election form?

The benefit payment that you are scheduled to receive at the end of the month in which you pass away remains payable and does not need to be returned MPERS. We will direct deposit this final payment to your bank account we have on file. However, if your bank were to reject this final deposit due to your passing, MPERS will pay your final benefit to the designated beneficiary on your Retirement Election form.

If you are married and elect either the joint and 50% survivor or joint and 100% survivor benefit payment options, then you do not need to designate a beneficiary for your final payment. Your spouse will automatically receive your final payment as well as the subsequent lifetime survivor benefits.

If you select one of the guaranteed payment benefit payment options, then the designated beneficiary on your Retirement Election form will receive your final payment as well as any remaining guaranteed payments (if the guaranteed payment window has not already expired).

Benefit Payment Options

Can I change the benefit payment option that I chose on the Retirement Election form?

Once MPERS has sent your first retirement benefit payment, you can no longer change your benefit payment option except under three circumstances:

1) If you were single at the time of retirement and chose the life income annuity option and later get married, you will have one year from your date of marriage to name your spouse as a beneficiary for either the joint and 50% survivor or joint and 100% survivor options.

2) If you were married at retirement and chose either the joint and 50% survivor or joint and 100% survivor options and your spouse dies before you and you later remarry, you will have one year from your date of marriage to name your new spouse as a beneficiary for either the joint and 50% survivor or joint and 100% survivor options.

3) You were married at retirement and chose either the joint and 50% survivor or joint and 100% survivor option and later divorced. Effective January 1, 2021, if you elected a joint and survivor benefit payment option, your benefit can revert (pop up) to the higher life income annuity amount upon submitting a completed Divorce – Survivor Option Reversion form and a copy of the divorce decree to MPERS. The divorce decree must be approved by MPERS’ counsel and must provide sole ownership by the member to all rights in the annuity and must further provide that the former spouse shall not be entitled to any survivor benefits.

Can You explain the guaranteed payment option?

The guaranteed payment options are a source of confusion for our members.  A guaranteed payment option reduces the retirees’s benefit for the rest of his or her life, regardless of how long they live. The guaranteed payment window (i.e., 60, 120, or 180 months) begins on the retirement date, not at the date of death.

EXAMPLE: Someone who chooses 120 guaranteed payments but lives for only 60 months, will have 60 more benefit payments to pass on to a designated beneficiary(ies).  Someone who chooses 120 guaranteed payments that lives for more than 120 months will have no more benefit payments to pass on to a designated beneficiary(ies).  The retiree will continue to receive monthly benefit payments, however, if they pass away, their beneficiary(ies) will not receive a benefit because 120 months have passed since retirement.

Canceling or Postponing Retirement

Can I cancel my retirement after I have applied to retire?

If you applied to retire and no longer wish to retire, you may cancel your retirement by sending MPERS a written request of your desire to cancel. An email to mpers@mpers.org will suffice as a written request.

IMPORTANT: Once MPERS sends you your first benefit payment, you can no longer cancel your retirement.

If I change my mind after I've applied to retire, can I postpone the date?

If you applied to retire on a particular date and desire to postpone your retirement to a later date, you may do so by sending MPERS a written request of your desire to postpone. An email to mpers@mpers.org will suffice as a written request. Keep in mind that you must apply to retire no later than one month plus one day in advance of your retirement date and no sooner than four months in advance of your retirement date.

EXAMPLE: Notice of Retirement form signed and submitted in January for a retirement date of March 1st can be postponed to April or May. If a postponement to June or beyond is required, you must cancel your Notice of Retirement form and reapply at a later date.

Cost of Living Adjustment (COLA)

When will I receive my annual COLA?

Closed Plan retirees receive their annual COLA every October.

Year 2000 Plan retirees receive their COLA on the anniversary of their retirement date, or if BackDROP is elected, on the anniversary of their BackDROP date.

2011 Tier retirees receive their COLA on the anniversary of their retirement date.

Benefit payments are made on the last working day of each month.

EXAMPLE: A Closed Plan retiree receiving the COLA in October can expect to see the increase reflected in the October 31st benefit payment (assuming October 31st did not fall on a weekend).

Designation of Agent

Who can I name as my "agent" on the Designation of Agent form and what exactly is the purpose of this form?

The Designation of Agent form is optional but suggested. You can name anyone (such as a spouse, child, relative, friend, etc.) to be your agent. Because your agent will have the authority to act on your behalf with regards to your MPERS-related affairs in the event that you become disabled or incapacitated, you should choose someone whom you fully trust to act in your best interest.

The agent’s powers to act on your behalf will only take effect upon written notification from your physician regarding your disablement or incapacity.

You can revoke your designation of an agent at any time.

Documentation

I am married but I am choosing the life income annuity payment option. Am I still required to provide you with my spouse's proof-of-age document and my marriage certificate?

If you are married and choose either the life income annuity or one of the guaranteed payment options, then you do not need to submit your spouse’s proof-of-age document or your marriage certificate.

In what format can I return the forms and proof documents associated with the retirement process to MPERS?

MPERS does not require original documentation.
Documentation can be submitting via the following:

Email: mpers@mpers.org

Fax: (573) 522-6111

Mail: MPERS
PO Box 1930
Jefferson City, MO 65102-1930

Please do not include full social security numbers on any documentation that is emailed to MPERS.

Employment After Retirement

Can I return to work with the State of Missouri after retirement?

Each MPERS’ plan has differing rules about returning to work with with the State of Missouri. To view these rules, please visit the Reemployment after Retirement page of our website.

Can I make an arrangement before I retire to come back to work on a part-time basis after I retire?

No.  Regardless of the plan you are in or the benefit-eligible status of the position, it is important to remember the following IRS requirements:

1. There must be a 30-day separation between retirement and reemployment to be considered retired and
2. Prior to retirement, there cannot be a predetermined arrangement to return to work

More information about the IRS requirements regarding separations can be found by viewing the Bona Fide Separation and Reemployment after Retirement FAQ.

Payments

Can I change my direct deposit at anytime?

Yes, you may change your direct deposit electronically via your myMPERS Secure Member Access or by contacting MPERS for a paper form.

Can my retirement check be deposited in the same account as my paycheck?

Yes, however, MPERS does not share payroll information with your employer.  You will need to complete a Direct Deposit Authorization Form as part of the two-step retirement process through MPERS.

How do I receive my monthly retirement benefit from MPERS?

MPERS direct deposits all monthly retirement benefit payments the last working day of the month to the account on file.

I want to retire/live in a country other than the United States. Can I have my retirement benefit direct deposited in a different country?

Yes, but you will need to open an account with a local branch of a U.S. chartered bank.  Many large banks have local branches in foreign countries.  Please contact MPERS to discuss your individual situation.

When will I receive my retirement benefit payment?

MPERS pays benefits once per month; always on the last working day of each month. For example, the March 2019 benefit would be paid on March 29 because March 31 is a Sunday.

Prior Service

Can I acquire credit for prior public service after I have applied to retire?

All outside service credit must be acquired before you apply to retire. As a reminder, you must apply to retire no later than one month plus one day in advance of your desired retirement date.

Retirement Deadlines

What are the deadlines for Step 1 and Step 2 of the retirement process?
Intended Date of Retirement Step 1: Notice of Retirement
Due at MPERS
Step 2: Retirement Election Form
Due at MPERS
January 1 September 1 – November 30 December 31
February 1 October 1 – December 31 January 31
March 1 November 1 – January 31 February 28
April 1 December 1 – February 28 March 31
May 1 January 1 – March 31 April 30
June 1 February 1 – April 30 May 31
July 1 March 1 – May 31 June 30
August 1 April 1 – June 30 July 31
September 1 May 1 – July 31 August 31
October 1 June 1 – August 31 September 30
November 1 July 1 – September 30 October 31
December 1 August 1 – October 31 November 30

Retirement Process

Do I apply to retire through MPERS or my employer?

Your Notice of Retirement Form must be submitted to MPERS, not your employer.  You can complete the Notice of Retirement Form electronically via myMPERS Secure Member Access,  or you can contact MPERS or your employer to obtain a paper form.

Do I need to complete the "Beneficiary Designation for Final Payment and Remaining Guaranteed Payments" section of the Retirement Election form?

The benefit payment that you are scheduled to receive at the end of the month in which you pass away remains payable and does not need to be returned MPERS. We will direct deposit this final payment to your bank account we have on file. However, if your bank were to reject this final deposit due to your passing, MPERS will pay your final benefit to the designated beneficiary on your Retirement Election form.

If you are married and elect either the joint and 50% survivor or joint and 100% survivor benefit payment options, then you do not need to designate a beneficiary for your final payment. Your spouse will automatically receive your final payment as well as the subsequent lifetime survivor benefits.

If you select one of the guaranteed payment benefit payment options, then the designated beneficiary on your Retirement Election form will receive your final payment as well as any remaining guaranteed payments (if the guaranteed payment window has not already expired).

Does my spouse have to sign the Retirement Election form?

If you are married and choose either the life income annuity or one of the guaranteed payment options, then your spouse must consent to your election by signing the Retirement Election form.

If you are married and choose either the joint and 50% survivor option or the joint and 100% survivor option, spousal consent nor signature is necessary.

I missed a deadline in the application process, what happens now?

If you miss the filing deadline for step 1, the  Notice of Retirement form, then your retirement will be delayed by at least one month, depending on when your Notice of Retirement form is ultimately received by MPERS.

If you miss the filing deadline for step 2, the Retirement Election form, then payment of your first benefit will be delayed by at least one month, depending on when your Retirement Election form is ultimately received by MPERS.

EXAMPLE: You are retiring January 1, but did not submit your Retirement Election form by the December 31 deadline, then you will not receive your first retirement benefit on January 31 as expected.  Instead, you will receive two retirement benefits (one for January and one for February) on February 28, provided that you timely submit your Retirement Election form.

Applications to retire become null and void if the Retirement Election form is not submitted within 90 days of the date listed on your Notice of Retirement form.

Must MPERS notify my employer of my retirement?

We notify the employers of all new retirements so that they may process the retiree’s medical insurance premiums appropriately.

When will MPERS notify my employer that I have applied to retire?

MPERS will notify your employer the first of the month following receipt of the Notice of Retirement form.

EXAMPLE: If you submit your Notice of Retirement form on January 15, MPERS will notify your employer on February 1.

Sick Leave, Annual Leave, Compensatory Time

What happens to my annual leave and compensatory time (comp time) when I retire?

Your annual leave and compensatory time balances do not factor into your MPERS retirement benefit.  You must contact your employer to discuss your options for annual leave and comp time balances.

What happens to my unused sick leave when I retire?

You will receive one month of creditable service towards the calculation of your retirement benefit for every 168 hours of unused sick leave. Credit for unused sick leave is granted in whole month increments only.

EXAMPLE: If your final unused sick leave balance is 200 hours, 168 hours would convert to a month of creditable service, but the remaining 32 hours will not count towards the calculation of your retirement benefit. Credit for unused sick leave does not change your retirement eligibility date, so it cannot allow you to retire sooner, but it will increase your retirement benefit by providing you with more service credit.

Taxes

Can I change my tax withholding at any time?

Yes, you change your tax withholdings electronically via your myMPERS Secure Member Access account or by contacting MPERS for a paper form.

Someone told me that I will not have to pay Missouri state income tax on my retirement benefit. Is that true?

Your retirement benefit through MPERS is subject to federal and state income taxes. However, the state of Missouri does have a public pension exemption. Your benefit through MPERS qualifies as a “public pension.”

Please visit the Missouri Department of Revenue’s explanation of the public pension exemption and scroll down to “How is my public pension taxed” for more information.

Representatives of MPERS are not authorized to dispense tax advice. We recommend that you contact a tax professional if you have questions about your tax situation.

Will I owe taxes on my BackDROP distribution?

If you elect to receive your BackDROP in cash (or partly in cash), then the amount that you receive in cash is reported as taxable income in the year in which you receive it.

MPERS is required to withhold 20% for federal tax from BackDROP distributions received as cash. MPERS does not withhold for state tax, although you may owe state tax on BackDROP distributions received as cash.

If you elect to receive your BackDROP in cash, an early distribution penalty of 10% may be assessed by the IRS if you are under age 59½ unless an exception applies. A notable exception as it pertains to MPERS is that if you separate service in the year in which you turn 55 or later, then you are exempt from the 10% early distribution penalty. Qualified public safety officers are exempt from the early distribution penalty on BackDROP distributions received as cash so long as they separate from service during the year in which they turn 50 or later.

BackDROP payments that are rolled over into qualified retirement accounts are not subject to the 20% withholding requirement and also not subject to the 10% early distribution penalty.

Will I receive a pay stub each month?

You can access your monthly pay stubs electronically via myMPERS Secure Member Access.