All of LAGERS retirement, survivor, and disability benefits are based on a single formula.   The formula is designed to reflect an individual’s working career by taking into account his or her salary and length of service.  The  longer a members works and the more they earn, the greater the benefit.

Return to Summary of Benefits

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Although the formula is the same for all retirement, survivors, and disability benefit calculations, each component of the formula may vary depending on the elections of each employer’s governing body.  Each employer elects and funds their own set of benefits.

Benefit Program  X  Final Average Salary  X Credited Service

 

=  Monthly Lifetime Benefit

Benefit Program

The benefit program represents a specified percentage of a member’s final average salary multiplied by his or her credited service.  The higher the multiplier, the higher the monthly benefit.  The benefit program elected by each employer does not impact the amount of the employees’ contribution.

Final Average Salary

The final average salary is calculated as either the highest 36 or 60 consecutive months of wages from and employee's last 120 months of credited service.  The higher the final average salary, the greater the monthly benefit in retirement.

Because LAGERS is a state-wide plan with hundreds of member employers, an employee can work for any combination of member employers and continue to accumulate credited service toward his or her benefit.

Working for Multiple LAGERS Employers

Credited Service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credited service represents the amount of time an employee has worked for a LAGERS employer.  It is calculated as the sum of membership service and prior service.

Prior service is employment prior to the date an employer joins LAGERS.  A LAGERS employer has the option to elect to cover 100%, 75%, 50%, or 25% of prior service.*  In order to receive credit for all eligible prior service, an employee must be an active employee on the effective date of membership and continuously employed with that employer for one year thereafter, or until death or total and permanent disability, whichever is earliest.

*Prior service is a one-time election a member employer makes when joining LAGERS.  By law, it cannot be changed. If an employer has a retirement plan that was determined to be ‘similar in purpose’ to LAGERS, prior service will be handled on a case by case basis.  Click here to learn more about how this may impact a member's benefit. By law, no employer may duplicate or impair employee benefits that have already been earned.

Membership service is any employment earned after an employer has joined LAGERS. A member earns one month of credited service toward his or her benefit for every one month of full-time employment in a LAGERS covered position.

Calculating Credited Service

Assume Jane is hired on 01/01/1990 and works until 01/01/2015.  On 01/01/2010, her employer joins LAGERS.  The months and years that Jane will receive credited service for are determined by the election her employer makes when they joined.

Example 2: If Jane’s employer elects to cover 50% prior service, her service calculation would look like this:

10 Years of Prior Service

+

5 Years of Membership Service

=

15 Total Years of Credited Service

Example 1: If Jane’s employer elects to cover 100% prior service, her service calculation would look like this:

20 Years of Prior Service

+

5 Years of Membership Service

 =

25 Total Years of Credited Service

Consecutive wages do not necessarily fall within 3 or 5 exact calendar years, but rather over 36 or 60 months within the last 120 months of LAGERS credited service.  For most members, as in the above example, the highest consecutive months of earnings will be the last either 36 or 60 months; however, the highest months may fall anywhere within the 120 month window.

*Not available for new election

**Only available for employers not participating in Social Security

 

What if my employer changes benefit programs?

Read our blog on this topic:  My employer is changing benefits, what do I need to know?!

Life Programs

Multiplier

Example Calculation with $3,000 Final Avg Salary & 25 Years of Service

Life & Temporary Programs

Multiplier

Example Calculation with $3,000 Final Avg Salary & 25 Years of Service

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Example of a member who worked for 3

LAGERS Employers

 

City A.............. .015 x $3,000 x 15 years = $675 per month

County B........  .010 x  $3,000 x   3 years = $  90 per month

Library C.......   .020 x  $3,000 x   7 years = $420 per month

 

Total LAGERS Benefit:   25 total years   =    $1,185 per month

Please note: Employee refunds or extended breaks in service may result in a forfeiture of applicable credited service.

In the above example, the employee would have 25 total years of LAGERS credited service.  Credited service with each employer would be calculated separately at the unique benefit levels elected by each employer.  Each of these employers would be financially responsible only for the service the employee earned while working for them.  Only the last 120 months of credited service are used in the calculation of final average salary.

Missouri Local Government Employees Retirement System

Phone:   1-800-447-4334      Local:  573-636-9455        Fax:  573-636-9671     Email: info@molagers.org

 

701 West Main St.     PO Box 1665     Jefferson City, MO 65102