Comparison of Closed Plan/Year 2000 Plan

If you were hired before July 1, 2000, you are a member of the Closed Plan. At retirement, you may elect to stay in the Closed Plan or switch to the Year 2000 Plan if you:

• Are an active member of the Closed Plan (actively employed in a benefit eligible position).
• Are a vested-former member of the Closed Plan (eligible for future retirement benefits under the Closed Plan, but no longer working for the state).
• Are receiving disability benefits through MPERS’ disability plan.
• Are on a leave of absence.

Consider the following factors before making your choice:

Benefit Formula

• The multiplier in the Closed Plan is 1.6%. The multiplier in the Year 2000 Plan is 1.7%.

Temporary Benefit

• The temporary benefit is available only in the Year 2000 Plan. It provides supplemental income until age 62.
• At age 62, the temporary benefit and any cost-of-living adjustments (COLAs) earned on that amount go away.
• Survivors, beneficiaries, and ex-spouses are not eligible for the temporary benefit.

If you die while receiving the temporary benefit, any survivor benefits will be determined by your base benefit amount and the payment option elected at retirement.

The temporary benefit is only available in the Year 2000 Plan and may be received in addition to the base benefit by those retiring prior to age 62 under the Rule of 80 and uniformed members under mandatory retirement at age 60.

At age 62, the temporary benefit and any cost-of-living adjustments (COLAs) earned on that amount end.

Cost-of-Living Adjustments (COLAs)

• Regardless of which plan you elect, you will receive a COLA each year for your lifetime.
• The maximum COLA rate for each plan is 5%.
• If you were hired before August 28, 1997, the Closed Plan provides a minimum 4% COLA each year until the total increases equal 65% of your initial benefit. Generally speaking, it takes about 12 years to reach your COLA cap. After you reach the COLA cap, the annual COLA rate will be 80% of the increase in the Consumer Price Index (CPI-U) for the previous year. The annual COLA rate for Closed Plan members hired on or after August 28, 1997, and for Year 2000 Plan members is based on 80% of the increase in the CPI-U.

Eligibility

• It is possible to become eligible to retire at different times in the Closed Plan and the Year 2000 Plan.

Survivor Benefits

• The Closed Plan provides a “free” survivor benefit for your spouse—the unreduced 50% joint & survivor option. Your monthly retirement benefit will not be reduced to pay for the future survivor benefit.
• There are no “free” survivor benefits under the Year 2000 Plan.
• Because of the larger reduction factors, a joint & survivor option costs more under the Year 2000 Plan.

The information below provides a side-by-side comparison of the primary benefit provisions of all MPERS plans to help guide your decision.