Recent news reports have discussed a proposed merger of Missouri’s five largest public pension plans. The merger plan’s proponents say that the consolidation of the five plan’s investments would result in lower investment costs and higher returns.
PSRS/PEERS does not agree with this analysis and does not support such a merger. PSRS/PEERS is the state’s largest public pension plan with over $26 billion in assets. The systems’ investment costs are already very low compared to other public pension plans – less than half that of the Missouri State Employees’ Retirement System (MOSERS).
It is unclear what affect such a merger would have on each of the plan’s structure and policies on contributions, investment strategies, benefit levels, etc. The five pension systems considered for the merger are the Public School Retirement System of Missouri (PSRS), the Public Education Employee Retirement System of Missouri (PEERS), the Missouri State Employees’ Retirement System (MOSERS), the Missouri Local Government Employees Retirement System (LAGERS), and the Missouri Department of Transportation & Patrol Employees’ Retirement System (MPERS). Each of these systems has its own unique contribution policies, assets, liabilities, investment strategies, benefit structures and members, which makes a merger a complex proposition.
“A fund like ours, where our teachers make a 13.5% contribution, is different than pension plans where employees make no contributions,” said PSRS/PEERS Executive Director Steve Yoakum. “For example, we receive no state funds, and have a totally different investment style than MOSERS and take much less risk. We have to consider different strategies to manage our different liability streams.”
Any merger of state pension plans would first have to be introduced to the Missouri General Assembly as a legislative proposal. No such legislation has been proposed at the time this newsletter was prepared. If it is, PSRS/PEERS will track the bill’s progress during the legislative session via this newsletter and our Web site. Find updated information on this proposal.
Your 2010 Benefit Statement will include more information about your PSRS benefits than ever before. Statements will mail this January in an expanded, easier-to-read format.
Your Benefit Statement is a record of your:
You can also view your account information online.
Per direction from the IRS, PSRS will be implementing new federal income tax withholding tables effective with your January 2010 benefit payment. For 2010, the IRS has provided an adjustment procedure to increase the withholding on most pension payments by approximately $400 per year for those claiming single status and $600 per year for those claiming married status. This additional withholding amount will properly offset the Making Work Pay credit which is not available for pension income.
If you submitted a Tax Withholding Authorization form in 2009 to offset this credit by increasing your withholding, you may wish to file a new Tax Withholding Authorization form for 2010 to remove the additional withholding. Your 2010 Benefit Statement will show your 2009 and 2010 tax withholding amounts based upon your most current withholding election. You can find the Tax Withholding Authorization form online or you can call (800) 392-6848 to have one mailed to you.