Keeping Costs in Check

Every year, retirement systems compare themselves to their peers by examining administrative costs. In simple terms, this measure reflects how much it costs to operate the retirement system and provide services to members and retirees.

These costs include processing retirement applications, paying monthly benefits, providing member counseling and education, maintaining technology systems, producing communications, and meeting legal and regulatory requirements.

A common benchmark is administrative cost per member, which is calculated by dividing administrative expenses by the total number of active members and benefit recipients served by the system.

For the current reporting period, MPERS’ administrative cost is $209 per member.

Among similar public pension systems across the country, MPERS ranks as having the third-lowest administrative cost per member. The peer average is $382 per member, meaning MPERS operates at a significantly lower cost than many comparable retirement systems.

While every retirement system is different, this comparison suggests MPERS provides services to members and retirees while keeping administrative expenses relatively low.

Of course, cost is only one measure of performance. Service quality, long-term financial strength, benefit security, and member satisfaction are also important. Looking at these measures together provides a more complete picture of how a retirement system is performing.

Maintaining a low cost per member reflects MPERS’ ongoing commitment to managing resources responsibly while continuing to serve active members, retirees, and beneficiaries throughout Missouri.