Governor Nixon Signs LAGERS Local Plan Administration Bill into Law
June 13, 2016 --
LAGERS is excited to announce that early last week, Governor Nixon signed House Bill 1443, LAGERS' Local Plan Administration Bill!
This change in law will amend LAGERS’ governing statutes to allow an employer of the system to petition the LAGERS Board to take on the administration of a previous retirement plan. Under the new law, for an employer to become eligible to transfer their plan administration, they must first have frozen their prior plan and elected to cover future employee service in the LAGERS system. A vote of the active employees of the frozen plan must, by a simple majority, approve the transfer of the plan’s administration, followed by a concurring resolution from the pension plan’s board of trustees. Once approval of the transfer has been locally obtained, an employer may then petition LAGERS to accept the plan’s administration. In short, all stakeholders must agree that this is a win-win before moving forward.
What the statute change will do:
•Provide an alternative solution for the administration of an employer’s frozen pension plan
•Allow employers to reduce administrative cost by taking advantage of LAGERS’ expertise and economies of scale
•Enable employers, who wish to do so, to get out of the pension administration business
•Continue to pay accrued benefits to retirees under the frozen plan in accordance with the plan’s original governing documents
What the statute change will NOT do:
•Change the benefits for members and retirees that have been accrued under the frozen plan
•Relieve an employer of its financial obligation to fund their frozen plan
•Mandate that an employer must consolidate frozen plans into LAGERS
•Allow for the administration of an open pension plan
•Have any adverse financial impact to the LAGERS system
LAGERS staff has begun the process of discussing how this new law will be implemented in the coming months. Like everything we do at LAGERS, we want to make sure we get it right, and will be taking time to make sure this new endeavor is implemented thoroughly and thoughtfully. We plan to send updates to our employers as staff begins to work through the final details of implementation over the next few months. The law will go into effect on August 28, 2016.
Governor Nixon Appoints Citizen Trustee to LAGERS Board
April 15, 2016 --
Governor Jay Nixon has appointed Claire (West) Scoville as the citizen trustee of the board of trustees for the Missouri Local Government Employees Retirement System (LAGERS).
Ms. Scoville brings extensive public pension and policy experience to LAGERS board. Before retiring in 2011, Scoville operated her own consulting firm where she represented public pension systems, political subdivisions and other clients before the Missouri Legislature. Prior to this, Scoville worked for the Joint Committee on Public Employee Retirement from 1984 – 2006 and began serving as Executive Director in 1993. Her primary duties were to provide analysis and recommendations to the Legislature and to Missouri’s public retirement plans concerning the long-term fiscal and actuarial impact of state legislation and local ordinances.
In addition, Scoville has served on many public pension related boards including the Jackson County Employees Pension Plan, Jefferson City Firefighters Retirement Fund, City of St. Louis Pension Task Force, State Retirement Advisory Commission, and the Missouri Association of Public Employee Retirement Systems. She also previously served as the citizen trustee on the LAGERS board from 2001-2004. She received the Public Pension Lifetime Achievement Award from the Missouri Association of Public Employee Retirement Systems in 2007.
Ms. Scoville’s term begins immediately and will end December 31, 2020. She replaces John R. Franklin, whose term expired. The LAGERS board of trustees is made up of three elected member trustees, three elected employer trustees and one appointed citizen trustee.
LAGERS Board of Trustees Approves New Actuarial Assumptions
April 5, 2016 --
At the March 25th meeting, LAGERS Board of Trustees approved new actuarial assumptions to be used in the calculation of employer contribution rates.
While most assumptions required modest or no adjustment, more significant changes were approved for the disability and mortality assumptions. An actuarial experience study found that LAGERS retirees are living longer and are projected to continue living longer into the future. This means that benefits will be paid to retirees for a longer period of time, and will require a contribution adjustment to ensure that there are enough funds set aside to pay for these longer retirements. The study also concluded that the number of disability retirements have also increased and so an adjustment to the disability component contribution rates will also be made depending on which departments an employer provides LAGERS coverage for (general, police, and/or fire) and the elected benefit program of the employer.
LAGERS Board of Trustees follows a funding policy that requires an experience study to be completed every five years by LAGERS’ actuaries reviewing each of the assumptions used in calculating employer contribution rates. The purpose of this study is to determine if the assumptions used in the calculation remain appropriate given past and anticipated experience.
LAGERS takes this process very seriously in order to ensure that future benefits are being properly pre-funded so that members today and tomorrow can continue to enjoy the security of their hard earned retirement benefits. LAGERS employers can expect to see the new assumptions applied to their 2017 employer contribution rates, which will become available in July.
The Director's View, A Message from LAGERS' Executive Director
2015 in Review
Frequently in 2015, LAGERS was pushed to the forefront as a public pension system that was successfully meeting the needs of its members, retirees, employers and the taxpayers of Missouri. These accolades came from varied sources: the membership, elected officials, other public retirement systems and the press. For the LAGERS Board and staff, this was the outcome of a tireless pursuit of the system’s mission statement: “To provide secure retirement, survivors’, and disability benefits to members and beneficiaries in the most efficient and economical manner possible, while providing superior service and fulfilling its fiduciary obligations.” It is the fulfillment of our mission that results in LAGERS getting it right for all stakeholders.
In 2015, we saw the financial security of LAGERS continue to strengthen. For the sixth consecutive year, LAGERS Funding Progress continues to increase with a 2015 prefunded ratio of 94%. As a result of strong financial performance, nearly 7 out of 10 LAGERS employers will see reductions in their contribution rates for 2016. These results are a testament to a strong plan design that provides reasonable employee benefits, supported by a superior governance structure.
LAGERS staff makes a concerted effort to communicate face-to-face with the membership on a regular basis. In 2015, the system hosted greater than 125 meetings across the state of Missouri in the form of prospective and current employer board meetings, pre-retirement seminars, multiple webinars and employee benefit fairs educating thousands on LAGERS benefits. In addition, LAGERS has taken to social media as an efficient means of communicating with the membership. Utilizing the LAGERS blog, Facebook, Twitter, and YouTube, the system had greater than 110,000 views. LAGERS secure web portal, myLAGERS, provides 24/7 access to member’s personal data with greater than 1 in 4 members enrolled as users.
LAGERS was named the 2015 Plan Sponsor of the Year, Public Defined Benefit category, by PLANSPONSOR Magazine. According to PLANSPONSOR Magazine, the system was chosen for this award because of its strong one-, three- and five-year investment returns of 19.0%, 12.2%, and 15.0% respectively, their innovative participant services, strong plan design features, leadership in public policy, and an overall focus on the membership. With over 3,000 different public defined benefit plans in the United States, LAGERS was extremely honored to receive this award.
Another unexpected accolade came from Amos Bridges, a watchdog reporter for the Springfield News-Leader. Amos wrote an editorial after diving into the financials of local governments participating in LAGERS. He closed the article with this HIGH complement, “My search for trouble turned up nothing but competence. So rest easy – the tax dollars and retirement funds invested with LAGERS appear to be in good hands.”
The LAGERS Board and Staff are humbled by all this recognition in 2015. The previous commentary just cites a few ways that LAGERS system continues getting it right for all stakeholders.
2016 Looking Forward
The 2016 legislative session of the Missouri General Assembly will again consider a couple of bills related to LAGERS. The first bill deals with LAGERS administration of legacy pension plans, which aligns with LAGERS core business function of providing pensions to local governments and is supported by a number of local governments. The second bill relates to the updating of LAGERS definition of public safety employees, on an optional basis to the employer, to more align with the federal government’s revised definition of public safety employees.
LAGERS mission has not changed, and rest assured, providing secure retirement benefits to local governments is our sole focus. As LAGERS delivers on its mission, we are comforted in knowing that over 60,000 members and retirees will have a secure retirement. The confidence expressed by the nearly 700 local government employers will not be misplaced, as LAGERS continues to deliver on our responsibilities to our members.
Keith Hughes, CEBS, CGFM
LAGERS Executive Director
LAGERS Retirees Will Receive a Cost of Living Increase in 2016
This year LAGERS retirees will receive a COLA (Cost of Living Adjustment) of around 1%. This increase will be reflected on October 1st and it means much more than just a slight increase to your monthly benefit. It shows the strength and overall financial security of your LAGERS pension system.
By now you know you’re rather fortunate to have a defined benefit pension plan as the foundation of your financial future. As a retired local government employee, LAGERS provides you with an exceptionally strong and secure pension plan. However, the added stability of your COLA is also something to be thankful for. More and more, we find other pension plans are not able to provide this to their retirees, ever, much less on a yearly basis, as LAGERS has historically been able to do. This means as time goes on; your benefit keeps pace with the economy and spending levels on goods and services, and won’t lose value every year.
“LAGERS cost of living adjustments are granted annually based upon the retirees date of retirement and applicable changes in the ‘consumer price index’ (CPI). Though this process may seem unnecessarily complex, I am extremely proud to share that 100% of LAGERS retirees have received increases equal to the CPI thereby maintaining 100% purchasing power in retirement,” says Keith Hughes, Executive Secretary.
Below are some things to understand about the benefit of having a COLA with your LAGERS benefit:
ALL retirees will receive a paystub in October showing your individual increase.
LAGERS Pension Funding Hits Close to 95%
Local Government Employees’ Retirement System on Firm Financial Footing
Jefferson City, MO - September 20, 2016 The Missouri Local Government Employees Retirement System (LAGERS), the pension fund that covers almost 60,000 Missouri local government employees and retirees, is 94.7% pre-funded according to the system’s actuary. This is up from 94.4% a year ago.
“This is wonderful news and a shining example of how LAGERS is getting it right for our members, employers, taxpayers, and the communities we serve.” said Keith Hughes, the Executive Director of the $6 billion LAGERS fund.
The pre-funded rate represents a pension plan’s assets versus liabilities, or, how much money a plan has on hand today to pay the benefits promised for tomorrow. Though LAGERS strives to be 100% funded, an 80% funded rate is normally considered the benchmark for a well-funded plan and the average funded rate for US public plans is 73%, according to the Center for Retirement Research at Boston College. A 95% funded rate is roughly equivalent to having pre-funded 95% of your home mortgage.
The LAGERS investment portfolio, which has a return of 7.57% for the last 5-year period ending June 30, 2016, is a major reason for the increase in the funding level.
An increase in the funded rate is good news for the 686 local government employers that participate in the LAGERS system, and ultimately, taxpayers across Missouri because it means LAGERS is in a better position to meet all of its obligations now and into the future.
2015 News Archives
LAGERS 2015 Holiday Office Hours
November 26, Thanksgiving Day - Office Closed
November 27 – Office Closed
December 24, Christmas Eve – Office Closes at Noon
December 25, Christmas Day – Office Closed
January 1, New Year’s Day - Office Closed
Another Year of Funding Increase
September 1, 2015 --
LAGERS funding level continues to show steady improvement this year, rising to 94.4% (on an actuarial basis). This is up from 91.7% just a year ago.
A large part of this year’s increase is due to the outstanding investment performance of LAGERS’ portfolio in 2014 of 19.04%.
LAGERS’ ultimate goal is to reach 100% prefunded. This means having enough assets on hand today to pay all promised benefits in the future. While LAGERS won’t ever have to pay all future benefits at once, we are committed to ensuring the security of our members’ financial futures through sound funding policy.
Everyone who works hard deserves the peace of mind of knowing that their future retirement benefit is secure and will be there for them -- something LAGERS works to ensure everyday!
The Results are In! LAGERS Shares Communication Survey Results
August 6, 2015 --
LAGERS recently asked our members to participate in a Communications survey to help us ensure that we are providing the best information possible in the formats that our members wish to receive it. LAGERS appreciates the participants who took time to complete the survey; we read every comment and hope that the results will help us provide even better communication for our members in the future! Here are a few excerpts from the results and comments!
Below are some of the comments we received on the survey and our responses:
For the past several years I have looked for a simple explanation of what that years COLA is. There is always some vague explanation and no number. I would like to have the number posted where it is easy to find and understand.
–The reason LAGERS does not publish the COLA number is because COLAs are not given as a blanket increase. LAGERS retirees receive cost of living adjustments that are cumulative and based on their retirement date. Since your retirement date is unique, your increase may be different than someone who retired the year before. Calculating COLAs this way helps ensure that every LAGERS retiree maintains 100% purchasing power with their benefit. Each October, LAGERS does mail retirees a check stub that will indicate the specific amount of your adjustment, if any.
I have always had a positive experience with LAGERS the thirty four years I have been a member.
The more information available on the LAGERS’ website, sent or e-mailed to employees is the best way of communication. Our employer does not offer assistance and lack up-to-date knowledge on this vital benefit.
–We understand that with over 670 different employers in our system, there will be varying degrees of communication between employers and their employees. LAGERS places a high priority on ensuring our website has the most current and relevant information possible. We have also been exploring ways to provide more direct communication with members, so that we are landing directly in your mailbox or inbox!
All is good – you all do a very good job with communicating with members. I enjoy the Webinars also.
–LAGERS webinars are a great way to get information from LAGERS, especially for those who are audio or visual learners! We hope to work in the next year to improve member and retiree awareness of these events!
My experiences with the LAGERS Staff when I have a question or need something, they have been outstanding and timely in providing me with information. Great and professional group of individuals – others could learn from you!
Would like to know how to set up an account with password(s). The latter to make any changes to my account such as changing to another bank or how much I am receiving and a letter supporting I do receive an annuity.
-myLAGERS is a great resource for members and retirees alike. You may set up an account by clicking myLAGERS link from our homepage, www.molagers.org, and simply clicking the “Enroll Now” button. If you have any issues setting up or accessing your account, give our office a call, and we would be happy to assist you.
Thank you for making it possible for me to transition from a local government employee to a happy new retiree! I couldn’t have done it without you!
-LAGERS believes that retirement security should be for everyone. We are happy to hear you are enjoying the security of your hard earned benefit!
The ECLIPSE portal is difficult to move through when reporting wages or searching for employees.
-We appreciate the feedback and are always looking for ways to improve both the myLAGERS and ECLIPSE system so that they are as easy as possible for our members and employers to use. One of the greatest challenges we faced when designing these systems was how vastly different the reporting needs of a Special Road District with 1 employee are to those of a County with 800 employees. While there may never be a ‘perfect’ system for all our employers, we did share the comments about ECLISPE and myLAGERS with the management team and will be looking for ways to improve this service in the future.
The newsletter does not go in-depth enough sometimes. Web site and staff members are great help!!
-We are pleased that you find our staff and website as great resources! We are also currently exploring options for expanding our newsletters so that we can provide more information to our members through this channel. Retirees can expect to see their newsletters, which have been mailed twice per year to become a quarterly publication. We are still currently discussing changes to the frequency and/or depth of our member’s newsletter as well.
Apparently LAGERS believes that all its members are tied into social media. Not everyone wishes to conduct their business on social media!
-Although a large portion of LAGERS’ members and retirees are engaged social media users, LAGERS certainly understands that not everyone uses these channels. LAGERS has not eliminated any of our traditional communication formats, but is always looking for ways to provide the best information in the formats our members and retirees wish to receive them in. One new resource you may find interesting is our weekly blog, no social media account required! Visit www.lagersbloggers.org and learn a lot of great information about your LAGERS benefit.
I think all important information should be mailed and not e-mailed. Sorry I am old.
-No apologies necessary! We understand everyone has different communication preferences. In fact, LAGERS default communication preference is paper. We have simply added the option for those who wish to receive electronic communication to do so.
BEST RETIREMENT SYSTEM IN THE COUNTRY!
-Thank you, we think so too!
The staff has taken great care of my retirement LAGERS needs. I never thought about LAGERS as a post-retirement resource before.
-LAGERS has recently ramped up our effort to connect with our retirees! Have you heard about our new Retiree Link Meetings? These retiree-focused events are free and provide an opportunity for retirees to meet with LAGERS staff, hear updates about your system, and enjoy other education programing related to your retirement. Plus, breakfast on us!
If you would like the complete results of this survey sent to you, please contact the LAGERS office.
Survey Recognizes LAGERS for Doing More with Less
June 25, 2015 --
LAGERS recently participated for the first time in an international pension benchmarking survey, which analyzed LAGERS performance in areas such as administrative cost efficiencies and customer service. The survey found that LAGERS is providing superior customer service at a low cost per member.
CEM Benchmarking, an independent global benchmarking company, conducted the survey by comparing LAGERS to a group of peers. CEM has surveyed over 75 leading global pensions systems and identified LAGERS peer group by selecting ten pension funds from their database that are of similar size and structure to LAGERS.
Of the notable findings on the survey, high marks in customer service were at the top, with a total service score of 86 out of 100. While LAGERS scored above our peer average in nearly every activity surveyed, the greatest impact to this score was the result of high member contacts, such as 1-on-1 counseling sessions, seminars, and targeted communication, as well as shorter call wait times, availability of features on myLAGERS, and less red tape when applying for benefits.
CEM defines service as 'anything a member would like, before considering costs,’ and while LAGERS scored very high in service, remaining good stewards of our members’ money is also a top priority. CEM reports that LAGERS Total Pension Administration cost was $16 per member below the peer average. One contributing factor to cost efficiencies is the low number of administration staff at LAGERS. LAGERS employs fewer administrative staff than any of our peers, which is remarkable considering LAGERS also had more member employers in our system than any of our peers, adding additional layers of complexity to the system administration.
These independent benchmarks not only help LAGERS to identify best practices, they also provide measurable information to help us to identify areas where we are excelling as well as areas in which we can improve. As part of our mission, LAGERS takes providing superior customer service in the most efficient and economical manner possible very seriously. The detailed report provided LAGERS with actionable measurements that will help LAGERS continue to provide our members with even better customer service at the lowest cost possible into the future!
2015 Legislative Session Closes with Little Passed
May 18, 2015 --
The gridlock that held many bills hostage in the final days of Missouri’s 2015 Regular Legislative Session made no exceptions for three LAGERS bills, all of which stalled in the final days of session last week.
LAGERS entered 2015 hopeful that this would be the year that the “Local Plans” bill would pass. LAGERS filed similar language in the 2014, with Senate Bill 675(2014) being Truly Agreed and Passed; however the bill never made it to law as it was vetoed by Governor Nixon last summer. House Bill 494 and Senate Bill 283 were LAGERS top priority this year, and with modified language to address the Governor’s veto concerns, LAGERS felt confident that this was year we could achieve a legislative solution for those member employers wishing to transfer the administration of their frozen pension plans into LAGERS.
Both House Bill 494 and Senate Bill 283 looked promising as they initially moved through their respective chambers meeting no opposition and with legislators agreeing that this language is good, common sense policy for Missouri’s taxpayers and local municipalities.
Unfortunately, SB 283 became weighted down with extra amendments, many of which were unrelated to LAGERS, and eventually succumbed to its injuries in Conference. HB 494 sailed through both its House and Senate committees, and looked as though it was on track to the governor’s desk. However it found itself among the countless pieces of legislation held up in the final days of the filibuster that shut down the Senate in its last week.
It was a tough year politically to accomplish anything at the capitol, but LAGERS still firmly believes that this legislation is great policy for Missouri’s taxpayers and for our members. We will continue to work towards a legislative solution that could potentially enable political subdivisions who wish to get out of the pension business to do so.
LAGERS’ other bill, House Bill 643, which would have allowed employers the option to classify certain public safety personnel as either ‘police’ or ‘fire’ employees for LAGERS purposes, also suffered a similar fate in the final days of session.
LAGERS looks forward to continuing to work with law makers next year to help ensure that the best policy for Missouri and Missouri’s taxpayers can be reached. And while 2015 did not move forward as hoped, LAGERS is reminded that our ultimate focus is to ensure that our members’ benefits are secure and protected today and into the future, something we continue to do every day.
LAGERS Wins National Award for Plan Administration
The Missouri Local Government Employees Retirement System (LAGERS) has been awarded the 2015 Plan Sponsor of the Year by PLANSPONSOR Magazine for the public defined benefit category. According to an article in the March issue of PLANSPONSOR magazine, the system was chosen for this award because of its strong one-, three- and five-year investment returns of 19.0%, 12.2% and 15.0% respectively, their innovative participant services, strong plan design features, leadership in public policy, and an overall focus on the membership.
“Anything and everything you do, stay focused on the membership, and you will always get the right results,” Keith Hughes, LAGERS Executive Director, said.
LAGERS is a $6.3 billion system that covers close to 60,000 current and former local government employees from 668 cities, counties, fire protection districts, libraries and other government agencies within the state of Missouri. Joining LAGERS is voluntary and the system adds about 15 new employers each year.
The magazine specifically noted LAGERS’ “Reframing the Debate” campaign that aims to show the value of the public sector workers that serve their communities. LAGERS found that 94% of their members continue living in the community they served after they retire. The retirement benefits they are receiving are then reinvested in the local economy. LAGERS Economic Impact Report, which is distributed to the state’s legislators, shows that $216 million was paid to the system’s retirees living in Missouri in 2014. Showing those kind of numbers to senators and representatives demonstrates that “there are two sides of that financial equation,” Hughes said.
PLANSPONSOR magazine is the nation’s leading source of information and solutions for retirement benefits administrators. According to the magazine’s web site, each year the editors recognize U.S. retirement plans that “show a commitment to their participants’ financial health and retirement success, and are leaders in their respective categories.”
LAGERS is the fourth Missouri public retirement system to be named the Plan Sponsor of the Year in past seven years. The Missouri State Employees Retirement System (MOSERS) received this honor in 2008, the Public School & Education Employee Retirement Systems (PSRS/PEERS) of Missouri in 2011, and the State of Missouri Deferred Compensation Plan was selected in 2013.
Check our video for our members!
2015 Legislative Session Underway with LAGERS Bill Filed
January 14, 2015 --
LAGERS' first bill of the 2015 legislative session was filed earlier this week by sponsor Representative Mike Leara. House Bill 494 would give local governments the opportunity to voluntarily transfer the administration of their frozen pension plan into LAGERS.
Similar legislation received wide support from law makers during the 2014 legislative session, being voted out of the Senate unanimously and passing the House 136-10. The 2014 bill, however, was vetoed by Governor Nixon in July. LAGERS has slightly modified this year’s proposal after hearing the concerns from interested parties.
Under the proposed legislation, the local government must already have some employees covered under LAGERS in order to pursue this option and final action could not be taken by the local employer without approval from the local pension board and the current plan members.
“We are a prime example of a system that would benefit from this,” said Norm Robinson, Jefferson City Fire pension board’s vice chairman. “The active firefighters are already in LAGERS, as are all the other city employees in Jeff City.”
“We currently have 50 retirees, 10 surviving spouses,” Robinson said. “We have expenses for actuarial services, auditing services, liability insurance — costs that would be mitigated by going into LAGERS.”
LAGERS Director, Keith Hughes, says there is no mandate for local governments to choose LAGERS for their pension administration.
“This simply gives the local employer another option for pension administration, allowing them to focus on serving their communities,” he said.
Senator Mike Kehoe, R-Jefferson City, who also sponsored the 2014 bill, called the proposal “common sense. It’s optional to (retirement) systems, and it just gives them some flexibility.”
The Director's View, A Message from LAGERS Director, Keith Hughes
2014 in Review
For LAGERS, calendar year 2014 will always be remembered as a year that the system made progress in achieving our mission. The stated Mission Statement is: “To provide secure retirement, survivors’, and disability benefits to members and beneficiaries in the most efficient and economical manner possible, while providing superior service and fulfilling its fiduciary obligations.” And this progress was achieved through an improved focus, through the lens of the membership. If an activity does not directly improve the retirement system for the membership and their employers, it does not get attention. This keen focus makes LAGERS a preferred provider of retirement benefits for members, retirees, employers and taxpayers in Missouri. The LAGERS Board and staff are privileged to hear the membership attesting that the services provided are ‘top notch’ and sufficiently varied to meet the needs of all stakeholders. It is these continual efforts that result in LAGERS frequently being named as the Missouri retirement system that is “Getting it Right” for all stakeholders.
The LAGERS Board of Trustees continues to focus on governance of the system. The Board adopted a formal Actuarial Funding Policy, with a targeted funding ratio of 100%, to ensure the systematic accumulation of assets to pay future benefits. Also, the Board approved an updated Statement of Investment Policy & Objectives permitting the investment staff latitude to pursue investment opportunities, within certain guidelines, and promptly report such activities to the Board. These two policies are integral in ensuring that LAGERS operates in the most economical manner possible.
At the request of LAGERS employers, the system pursued legislation permitting LAGERS to administer legacy pension plans for employers that placed newly hired employees in LAGERS. This legislation was voluntary in nature to the employer and permitted the legacy plans to seek a more efficient administrative option. This legislation was passed by the Missouri General Assembly but subsequently vetoed by Governor Nixon. These key actions are representative of the board fulfilling their fiduciary obligations to all stakeholders of the system.
For the fifth consecutive year, LAGERS Funding Progress continues to increase with a 2014 prefunded ratio of 91.7%. This is the ratio of assets versus liabilities at a particular measurement date, February 2014. Looking at a more granular level, 36% of the participating employer groups have Funding Levels greater than 100%. And as expected, with 146 new employers in the last decade many newly covered groups are making progress in their funded status. LAGERS continues to provide modest retirement benefits with the average retiree receiving $931 a month. In fact, 94% of the $231 million LAGERS paid in annual benefits in 2014 went to Missouri residents that support the local Missouri economy.
LAGERS investment portfolio continues to post top quartile performance with a one-year return of 6.9% net of fees for the year ending December 31, 2014. Further, looking through the longer-term perspective, the ten-year return of 7.6% and the twenty-year return of 9.2%, exceed the assumed investment return of 7.25%. The Board’s forward thinking governance model exemplified in the Investment Policy continues to deliver superior results. These long-term investment results are evidence that today’s retirement cost are not being passed on to future generations of taxpayers as acclaimed in the popular press but are one further example of the efficient manner that the Board and staff are “Getting it Right” for ALL stakeholders.
The LAGERS website has become the portal to various retirement related communications. In a society that expects 24/7 access to financial data, that is exactly what LAGERS website is delivering and in a variety of different formats. The LAGERS member web portal provides 24/7 access to member’s personal data and over 1 in 4 members (13,000 +) are currently enrolled users. In 2014, those members have run 4,000 personal retirement estimates at their own leisure using current LAGERS data. For those members that are more engaged in social media; the website provides access to Facebook, Twitter, YouTube, and the LAGERS weekly blog. The varied communication formats are just a sample of the superior service provided to the membership providing differing methods for employees to engage in their own personal retirement planning.
As noted in the 2014 review, LAGERS Board and staff endeavor daily to implement the system’s Mission Statement in providing secure retirement benefits to the membership.
2015 Looking Forward
The 2015 legislative session of the Missouri General Assembly will again consider a bill pertaining to LAGERS administration of legacy pension plans. The bill will likely be very similar to the 2014 legislative proposal with a couple of small modifications to address concerns in Governor Nixon’s veto message. This legislation aligns with LAGERS core business function of providing pensions to local governments and will be pursued again at the request of many LAGERS employers seeking this legislative solution.
The system’s financial strength is further exemplified through reductions in employer contribution rates, where 3 out 4 employer contribution rates are staying the same or will be declining during 2015. The system fully expects this trend of lower contribution rates to continue for the next couple of years. This pension contribution relief is greatly appreciated by not only the employers of the system, but the taxpayers in our valued communities as well.
Member education continues to be an emphasis of LAGERS. Specifically, 2015 will include 21 Pre-Retirement Seminars for those members approaching retirement. These seminars are extremely helpful to those approaching retirement and should be mandatory prior to stepping into retirement. In addition, LAGERS staff will be hosting 7 Retiree Link Meetings that are the system’s first retiree focused seminars. Staff trusts that these sessions will permit retirees to renew old friendships and gather current information on their retirement system thereby permitting these individuals to be engaged ambassadors of LAGERS.
Many in the press would have you believe that a secure retirement is no longer available. For those members participating in LAGERS, you know different. LAGERS has a consistent pattern of delivering promised benefits that makes LAGERS a preferred provider of retirement benefits for members, retirees, employers and taxpayers of Missouri local governments. A fully funded retirement plan is attainable and is the focus of your Board and staff.
Keith Hughes, CEBS, CGFM
LAGERS Executive Director
Tribute to a True Legend, Bill Schwartz 1951-2018
Seldom are you afforded the privilege to know a TRUE LEGEND. And that is exactly what Bill Schwartz was to the Missouri Local Government Employees Retirement System (LAGERS) and his family. Bill truly cared about family; his immediate family and relatives, the LAGERS staff and their family, the LAGERS membership and their family, and various professional contacts and their family.
Bill was a faithful employee of LAGERS for 36 years. He was appointed Director of the LAGERS retirement system at the age of 26. At the time of his retirement, he had served as director for 32.5 years which he believed was the 2nd longest serving director in the country. But Bill was more than just the Director; he knew every employee’s spouses name and in many cases even knew the children’s names. And family always came first when there were school activities or a physical need. Bill enjoyed family stories and laughed and cried with the employees. If you should be so unlucky as to have a severe illness, rest assured Bill would be there whether at the hospital or at home. Most of the time he was there to simply provide encouragement, but he shared in his own unique way that you were still needed back at the office. That is the caring boss and mentor that LAGERS staff will always remember.
Being born and raised in Central Missouri, Bill had a special connection with the LAGERS membership. Bill truly ‘Got it’; that the membership was a group of hard working employees that had dreams and aspirations for their local community. Daily he strived to assure that those employees would be financially supported in their retirement years, thereby giving back to the communities in their retirement years. Again, Bill knew the people, individuals and was saddened when adversity came to their doorstep. He also expressed great pride when the system was able to support a member through a lengthy retirement of 40 plus years.
Additionally, Bill made close relationships with various professional contacts over the years and served in multiple leadership positions beyond LAGERS. His leadership positions included: the Missouri Association of Public Employee Retirement Systems (MAPERS), the Missouri Society of Association Executives (MSAE), the National Association of State Retirement Administrators (NASRA), and the Government Financial Officers Association (GFOA). He was definitely a thought leader on public pensions and especially public pension accounting authoring numerous articles, handbooks, etc.
And though Bill was a Public Pension Legend, it was his family thought brought him the most enjoyment. He was extremely proud of his children’s accomplishments and regularly the Schwartz family attended the conventions combining business and a family vacation. Bill and his wife, Sandy, were nearly inseparable at the numerous events that required Bill’s attendance. They were definitely a team. And because of his heartfelt commitment to family, Bill will always be a TRUE LEGEND to each of us that had the privilege to know him.
2013 News Archives
Board of Trustees Election Held at 46th Annual Meeting
October 29, 2013 --
Two board vacancies were up for election at this year’s Annual Meeting. Robert Ashcroft, who is currently serving as the LAGERS Board Chairperson, was re-elected to the board as an Employer Trustee from Platte County. Ashcroft has been serving the LAGERS membership on the Board since 1982. Arby Todd was re-elected as a Member Trustee from the City of Lee’s Summit. Todd has been serving the LAGERS membership on the Board since 2006. Both will serve terms that expire in December of 2017.
Every LAGERS employer may send two delegates each year to participate in the election of LAGERS Board of Trustee members. This year, LAGERS hosted approximately 200 voting delegates representing member employers from across the state in addition to 30 non-voting delegates at the meeting which was held at the University Plaza in Springfield, MO last week.
The Board’s principal role is to ensure that LAGERS is appropriately governed and managed. The overriding goal of the Board is to serve the best interests of members and beneficiaries and to protect the assets of the system. Trustees set strategy and policy and delegate day-to-day management of the retirement system to staff. The LAGERS Board of Trustees is made up of three elected Member Trustees, three elected Employer Trustees and one appointed Citizen Trustee.
LAGERS One Year Investment Return Ranked Among Top-Performing Public Pension Funds
October 15, 2013 --
According to Pensions & Investments publication, LAGERS one year investment return ranked among Top-Performing Public Pension Funds in the country in 2013.
Following the outstanding investment environment of the past 12 months, LAGERS is pleased to report the one-year investment return of the system, as of June 30, net of fees, was 14.54%. This places LAGERS in the top 6% relative to other pension plans across the county.
Additionally, as of June 30, LAGERS 20-year return was 8.50%. Long-term returns of the system, which are especially easy to overlook during years of strong investment return, are a constant focus of LAGERS board and staff.
Outperforming LAGERS’ investment benchmark and assumed rate of return over the long run helps ensure that workers today will not pass retirement cost on to future generations of taxpayers. LAGERS continues to see an improving funding ratio, which as of June 30, was 86.5% on an actuarial value of assets and 95.1% on a market value.
This long-term financial health and stability of the system is not only good for LAGERS members who are earning and receiving their secure and protected benefits, but also for employers who can continue to provide competitive benefits that help attract and retain quality public servants. The continued financial health of the system also further demonstrates how LAGERS is Getting it Right!
All Retirees and Beneficiaries to have 100% Purchasing Power with LAGERS Benefit
September 24, 2013 --
Every October 1st, LAGERS Board of Trustees may provide retirees with a Cost of Living Adjustment (COLA). This year, eligible retirees can again expect to receive an increase in their monthly benefit amount. (Eligible retirees are those who have been retired for 12 full months including an October 1st.)
COLAs are designed to help protect retirees’ benefits from inflation over time. In other words, they help prevent a retiree’s benefit from losing value as the cost of goods and services rise. LAGERS COLAs are driven by the CPI and are cumulative based on the retiree’s effective date of retirement.
The ultimate goal of these Cost of Living Adjustments is to ensure that all retirees have full purchasing power with their benefit, and as of October 2013, LAGERS is pleased to announce that all retirees and beneficiaries will be at 100% purchasing power! To learn more about LAGERS Cost of Living Adjustments click here!
Retirees and beneficiaries can also log on to their myLAGERS account 24/7 to view their upcoming October payment, which will include their 2013 COLA!
Annual Meeting Locations Announced for 2014-2017
August 1, 2013 --
LAGERS Annual Meeting is going to look a little different beginning in 2014. We are pleased to announce two new venues for upcoming annual meetings starting in 2014!
LAGERS 2014 & 2015 meetings are scheduled to be held at the Sheraton Westport Hotel in St. Louis, MO and the 2016 & 2017 meetings will be held at the Holiday Inn Kansas City SE in Kansas City, MO!
LAGERS 2013 Annual Meeting will again be held at the University Plaza Hotel in Springfield, MO. Click here for registration information!
LAGERS Welcomes 28 New Employers in 2013
June 1, 2013, updated 12-31
LAGERS continues steady membership growth each year and is pleased to welcome our newest employers. To date, 28 new employers have elected to provide a secure defined benefit for their employees in 2013!
City of Winona
City of Herculaneum
Webster Grove Library
St Joseph Public Library
Willard Fire Protection District
Howell County Sheltered Workshop
City of Lexington
East Central Dispatch Center
Christian County Ambulance
Douglas County Library
Cass County Emergency Services
Christian Count Board for the Developmentally Disabled
City of Hopkins
Poplar Bluff Public Library
Audrain County SRD #13
City of New Haven
Sullivan County Memorial Hospital
Chariton County Ambulance District
Barry County E911
Battlefield Fire Protection District
Audrain County Health Department
Southern Stone Fire Protection District
Cooper County Health Center
Ebenezer Fire Protection District
Legislative Session Ends with One Bill Affecting LAGERS
May 25, 2013
The 2013 legislative session came to a close last week with no major legislative changes affecting LAGERS. House Bill 116, which was sponsored by Representative Tony Dugger, was the one piece of Truly Agreed and Finally Passed legislation that will have a direct impact on LAGERS. This bill, which is currently awaiting the governor’s signature, gives the State Auditor the authority to audit all public employee retirement systems, including LAGERS. This is not expected to directly affect any LAGERS employer.
The Director's View, A Message from LAGERS' Executive Director
2012 in Review
In reflection, 2012 was a year where the LAGERS Board and staff sharpened our focus on achievements that fulfill our fiduciary responsibility to the members, retirees, employers, and taxpayers of Missouri. In accomplishing these achievements it takes daily discipline to focus one eye on the moment at hand, while the other eye focuses on the long-term objectives of the system. As we read the daily news, we can find numerous examples, especially related to retirement issues, where total focus is placed on today’s benefits with complete disregard for the long-term impact of these decisions. LAGERS will never compromise long-term successes for short-term gain and will ensure the system succeeds for all vested parties. We will continue to get it right for our members, retirees, employers, and taxpayers.
For the third consecutive year, LAGERS funding progress continued to increase with a 2012 pre-funded ratio of 83.5%. This is the ratio of assets versus liabilities at a particular point in time. This amount would have been potentially higher if not for the 15 new employers electing participation in 2012 who began LAGERS participation with no assets. LAGERS continues to be an attractive option to public entities seeking a retirement solution and this sound pre-funded ratio exhibits the financial strength of the system and helps demonstrate the success of the system for both employers and taxpayers of Missouri.
Additionally, LAGERS investment portfolio continues to post top quartile performance with a one-year return of 3.6% for the year ending June 30, 2012. Looking through the longer-term lens, the ten-year return was 7.2%, and the fifteen-year return was 7.1%, nearly identical to the assumed investment rate of return of 7.25%. These investment results are further proof that the Board takes seriously the establishment of reasonable assumptions that are achievable over the longer-term, and will not pass retirement cost on to future generations of taxpayers.
In April 2012 the Board accepted with regret the resignation of Dick Franklin from the Board. Mr. Franklin served as the Governor’s citizen appointee and provided a unique perspective due to his past experience. In addition, Nancy Yendes, a member representative from the City of Springfield completed her 13th year of participation on the Board and chose not to run for reelection. I would like to personally thank each of these individuals for their participation on the Board. LAGERS successes are a direct reflection of the quality leadership provided by the entire Board.
The 2012 legislative session resulted in the passage of House Bill 1039 which provides for a tax deduction of up to $3,000 for retirees that have LAGERS withhold and submit premiums for health insurance or long-term care insurance. Currently, the federal law limits this provision to public safety employees, but thanks to the foresight of the LAGERS staff, the bill was drafted so that any changes in the federal law would immediately be extended to other employees.
Finally, 2012 resulted in the culmination of a 42 month software replacement project entitled ECLIPSE. The crown jewel of the ECLIPSE project was the release of the member web portal, myLAGERS, providing 24 hour/ 7 day a week access to members’ personal data, permitting them to work on retirement planning at their convenience.
2013 Looking Forward
With the Baby Boom generation now headed for retirement, LAGERS continues to increase the number of Pre-Retirement Education Seminars. The system offers full day seminars covering a diverse series of retirement related issues and an abbreviated evening session covering solely LAGERS related discussion. In addition, at the request of specific employers, LAGERS staff has participated in a number of specialized Pre-Retirement seminars for employees of a given employer. These seminars are extremely helpful to those approaching retirement and should be mandatory prior to making the leap into retirement. Educational opportunities like these are just one way that LAGERS continues our commitment to treat our members and employers right.
In addition to the traditional regional Administrative Workshops, employer training continues to be emphasized via a monthly webinar series. The webinar series will change to a monthly topical discussion in the summer of 2013 permitting employer representatives to refresh their knowledge based upon specific topics without ever having to leave their office.
LAGERS will also introduce a new enhanced website in the spring of 2013. The new site will provide simplified navigation permitting quicker access to LAGERS related information and forms. This user friendly format will also provide numerous interactive links enhancing the web user’s experience. In addition, LAGERS will be providing a Missouri map that identifies LAGERS financial footprint by region, tracking in excess of $200 million in annual benefits to Missourians. In turn, these monies are spent throughout the state creating a multiplier effect to Missouri’s economy. This expenditure of funds by public retirees is vital to the statewide economy.
Lastly, employer contribution rates will begin trending down for the majority of LAGERS employers in 2013. This should provide financial relief to local budgets of employers that participate in LAGERS.
Leave no doubt; LAGERS exists solely to provide a defined benefit retirement solution for local governments in Missouri, and works strenuously to ensure we accomplish our goals in a manner which maximizes benefits for our members, retirees, employers, and taxpayers. With that said, if you have any comments on how LAGERS could improve our service to help us further “Get it Right,” please contact us with any suggestions.
Keith Hughes, CEBS, CGFM
LAGERS Executive Director
2014 News Archives
LAGERS' CIO Reflects on 2014 Investment Results
December 30, 2014 --
Hear from LAGERS Chief Investment Officer, Brian Collett, as he reflects on the performance of the LAGERS portfolio in 2014.
Proposed Congressional Spending Bill Won't Affect LAGERS Benefit
December 15, 2014 --
U.S. lawmakers are considering an appropriations bill which would allow trustees of certain multi-employer defined benefit plans (pensions) to cut retirement benefits. Many articles in the media are unclear about which pensions will and will not be affected by these potential changes.
The bill's proposal, as written, would only affect certain private pension plans. Because LAGERS is a public pension governed by Missouri State Statute, LAGERS benefits will not be affected by the bill, as written. The Federal government has significantly greater oversight of private pension plans, and typically leaves the governance of public pensions to the states. LAGERS does, however, closely monitor issues like these to ensure we are doing everything we can to protect our members' current and future benefits.
Any changes to the benefits within the LAGERS system would require a change in Missouri's statutes, initiated by Missouri's General Assembly. Missouri's laws currently protect member benefits at the highest earned levels, so any future benefit cuts, made either by the Legislature or an individual employer could only apply to time going forward and would not reduce a benefit that had already been earned. There are currently no proposals of this nature before the Missouri General Assembly.
At 91.7% pre-funded, LAGERS remains the standard for well-structured, well-funded, and well-administered pension plans, and strives every day to ensure that the benefits of Missouri's hardworking public servants are protected and secure today and into the future. We're Getting it Right!
All Valid Marriage Licenses Recognized for Beneficiary Designations
December 15, 2014 --
Several recent court rulings have overturned Missouri laws which prohibited certain out-of-state marriage licenses from being recognized in Missouri and which also prohibited the issuance of marriage licenses to same-sex couples within the State.
The result of these court rulings now allows LAGERS to accept any valid in or out of state marriage licenses for the purpose of beneficiary designations.
Members may view and update their beneficiary designations 24/7 on their myLAGERS account. Click here to access or enroll in your myLAGERS account.
LAGERS Welcomes 11 New Employers in 2014
December 1, 2014 --
LAGERS continues steady membership growth each year and is pleased to welcome our newest employers. To date, 11 new employers have elected to provide a secure defined benefit for their employees in 2014! This brings the total to 665 employers across the state of Missouri who have chosen to provide secure, defined retirement benefits to their employees!
Madison Co Ambulance District
Caldwell Co Ambulance District
Village of Parkway
Central Crossing Fire Protection District
Barry-Lawrence Co Ambulance
City of Wright City
City of Granby
DeSoto Rural FPD
Ray Co 911 District
Monett Special Road District
Grand River Ambulance District
New Trustees Elected at 47th Annual Meeting
November 3, 2014 --
Two board vacancies were up for election at this year’s Annual meeting. Barry McCullough was elected as an Employer Trustee from the City of Gladstone, and Joan Jadali from the City of Webster Groves was elected as a Member Trustee. Both trustees will begin serving their first term on the LAGERS Board in January.
Mr. McCullough and Ms. Jadali will be filling vacancies left by Paul Thomson and Barry Hovis, respectively. Thomson, an Employer Trustee, and Hovis, a Member Trustee, have both been serving on the LAGERS board since 2011. Their terms expire at the end of the year.
Every LAGERS employer may send two delegates each year to participate in the election of LAGERS Board of Trustee members at the meeting. This year, LAGERS hosted approximately 180 voting delegates representing member employers from across the state, in addition to the 30 non-voting delegates at the meeting which was held at the Sheraton Westport Hotel in St. Louis, MO on October 30-31.
All Out-of-State Marriages Now Recognized Under Missouri Law
October 22, 2014
A recent ruling in a Jackson County court (Barrier et al. vs. Vasterling, et al.) knocks down a Missouri law and Constitutional Amendment that prohibits some valid out-of-state marriage licenses from being recognized in the state of Missouri. Attorney General Chris Koster office announced following the ruling that they would not be appealing the court’s decision.
For LAGERS members, this means that LAGERS is now allowed to accept any valid out-of-state marriage license for the purpose of beneficiary designations on retirement and survivor benefits for members.
LAGERS Earns Strong One-Year Investment Return
September 2, 2014 --
LAGERS is pleased to report as of June 30, a one-year investment return of 19.04% (unaudited), net of all fees.
Strong investment returns are always good news for members, employers, and taxpayers alike. LAGERS credits excess investment gains back to the employers, meaning that in many cases, employers will be paying less next year for the same level of benefits they are currently providing.
In fact, 7 out of 10 LAGERS rates will be decreasing in fiscal year 2015. This is in part not just due to this past year’s outstanding returns, but a longer track record of strong investment performance. LAGERS’ 20 year return is 9.43%.
For more information about LAGERS investments, visit our Investment Page.
2014 COLA Announced
September 2, 2014 --
LAGERS Board of Trustees has again approved a Cost of Living Adjustment for retirees this year. Most retirees can expect to see a 2.07% increase on their benefit this October.
Cost of living adjustments (COLAs) are designed to insure that retirees are able to maintain their standard of living throughout retirement, even as the cost of goods and services rises with inflation. LAGERS is pleased to report that as of this October, all retirees and beneficiaries will be at 100% purchasing power with their benefit.
For new retirees who did not receive a cost of living adjustment last October, the cumulative adjustment on their benefit will be slightly higher.
To learn more about LAGERS cost of living adjustments, visit our COLA page today!
Retirees and beneficiaries can also log on to their myLAGERS account 24/7 to view their upcoming October payment, which will include their 2014 COLA!
LAGERS Bill Vetoed by Governor Nixon
July 14, 2014 --
Senate Bill 675 was vetoed by Governor Nixon late last week. The bill, which was not testified against in either chamber, passed the House with a 136-10 vote in April and the Senate unanimously back in March. “We are obviously disappointed with the Governor’s veto as this bill is good policy for Missouri’s local government employers and taxpayers. We are currently working to determine how we will continue to pursue this important legislation in the future” says LAGERS Executive Secretary, Keith Hughes.
LAGERS Bill Heads to Governor’s Desk
April 30, 2014 --
Senate Bill 675 is on its way to Governor Nixon’s desk for approval after passing the Missouri House of Representatives Tuesday afternoon with a vote of 136-10.
The bill, which was sponsored by Senator Kehoe, and whose companion bill was sponsored by Representative Leara in the House, will amend LAGERS’ governing statutes to allow LAGERS board to take on the administration of an employer’s closed pension plan, effectively providing local governments another option for pension administration.
“It’s one of those common-sense things” says the bill’s sponsor Senator Kehoe. “It stops duplication, and you use an area that already exists to maximize the retirement system.”
LAGERS Executive Secretary, Keith Hughes, says of the Bill’s passage, “we are very pleased to see lawmakers agree that there is value to adding this option under law for LAGERS employers. We are particularly grateful to our sponsors Representative Leara and Senator Kehoe for their tremendous work on this important legislation.”
Senate Bill 675 now awaits the governor’s signature.
LAGERS Funding Continues to Climb
July 21, 2014--
Updated funding information from the Missouri Local Government Employees Retirement System shows the plan is now 91.7% pre-funded on an actuarial value of assets according to the system’s actuary. This is up from 86.5% just a year ago.
The pre-funded ratio represents LAGERS assets versus liabilities, or, how much money LAGERS has on hand today to pay the benefits promised in the future. At 91.7% funded, LAGERS not only exceeds most of its industry peers (the average of which for US public plans is 72%, according to the Center for Retirement Research at Boston College), but also continues to show steady improvement toward 100% funded, which is the ultimate goal of the system.
“This is wonderful news for our members and a sign of strong investment returns, a solid funding policy, and a focus on the long term.” said LAGERS executive secretary, Keith Hughes.
The LAGERS investment portfolio, which earned 17.4% in calendar year 2013, is a major reason for the increased in the funding level.
What does this mean for LAGERS employers? An increase in the funded rate is good news for the 664 local government employers that participate in the LAGERS system, and ultimately, taxpayers across Missouri because many employers will be paying less for the same benefits in the future.
New Legislation Would Offer Alternate Retirement Age for Some
March 17, 2014 –
Legislation was filed last week which may have a potential impact for some LAGERS members. House Bill 2150, sponsored by Representative Mike Leara, would allow employers of the LAGERS system the option to define emergency medical service personnel as ‘Firefighters’ for LAGERS purposes. This designation would allow eligible individuals who are currently classified as ‘General Employees’ to qualify for full retirement at age 55. Under the proposed legislation each employer must individually elect this coverage and would be responsible for any corresponding change in required contributions. LAGERS supports the bill.
The Director's View: A Message from LAGERS' Executive Director, Keith Hughes
2013 in Review
Calendar year 2013 was a year that built on LAGERS historical foundation. The system continues to offer reasonable retirement benefits, paid for with stable contribution rates supported by top tier investment returns. This consistent pattern of delivering promised benefits, as discussed, makes LAGERS a preferred provider of retirement benefits for members, retirees, employers and taxpayers in Missouri. This practice of delivering benefits, as advertised, is the primary reason that the system experienced the largest increase in participating employers since 1970, closing the year with 654 member subdivisions. The Board and staff are extremely proud to report that LAGERS is frequently named as the Missouri retirement system that is “Getting it Right” for all stakeholders. It is rewarding to hear this same message not only from the stakeholders which have a vested interest, but also from elected officials and Missouri taxpayers.
The LAGERS Board of Trustees continues to focus on the system’s Mission Statement: “To provide secure retirement, survivors’ and disability benefits to members and beneficiaries in the most efficient and economical manner possible, while providing superior service and fulfilling its fiduciary obligation.” To that end, it seems every board discussion centers around implications to the system not just this year; but 10, 20 or even 30 years from now. It is this special perspective that sets an unshakeable foundation that will benefit the members, retirees, employers and especially the taxpayers for generations to come. These special insights position the system to be the rock solid financial base that all stakeholders have come to expect and deserve.
For the fourth consecutive year, LAGERS Funding Progress continues to increase with a 2013 prefunded ratio of 86.5%. This is the ratio of assets versus liabilities at a particular measurement date, February 2013. The financial strength of LAGERS permitted the system to accept 28 new employers in 2013 which began system participation with no assets and still increase the system’s funded status. This sound prefunded ratio exhibits the financial strength of the system as LAGERS continues to be attractive to public entities seeking a safe, proven and efficient retirement solution. The continued financial strength of LAGERS proves the system is “Getting it Right” for the system employers and taxpayers of Missouri.
LAGERS investment portfolio continues to post top decile performance with a one-year return of 17.4% net of fees for the year ending December 31, 2013. Further, looking through the longer-term perspective, the ten-year return was 8.2% and the twenty-year return was 8.7%, exceeding the assumed investment rate of return of 7.25%. These investment results are further proof that the Board takes seriously the establishment of reasonable assumptions that are achievable over the longer-term, and will not pass today’s retirement cost on to future generations of taxpayers.
LAGERS introduced a new enhanced web site in the spring of 2013. The new molagers.org provides simplified navigation permitting quicker access to LAGERS related information and forms. In addition, the system provides a member web portal that provides 24/7 access to member data. Currently, 8,200 members take advantage of this access. Also in 2013, all of the 17,000 retirees and beneficiaries have received post retirement adjustments equal to the change in the Consumer Price Index (CPI) since their date of retirement. In turn, these monies are spent throughout the state supporting Missouri’s economy. In fact, 95% of the $210 million LAGERS paid in annual benefits in 2013 stayed in Missouri!
LAGERS continues to build on the rock solid historical foundation of a state-wide local government retirement system. I believe the numerous examples above site the various ways the system is “Getting it Right” for all stakeholders. If you have any suggestions how LAGERS can improve its service, please contact us.
2014 Looking Forward
LAGERS staff continues to expand the number of Pre-Retirement Seminars available to the membership with over 20 scheduled for calendar year 2014. The system offers full day seminars covering a diverse series of retirement related issues and also abbreviated half-day and evening sessions covering solely LAGERS related discussion. In addition, at the request of specific employers, LAGERS staff has participated in a number of specialized Pre-Retirement seminars for employees of a given employer. These seminars are extremely helpful to those approaching retirement and should be mandatory prior to stepping into retirement.
Employer and employee education continues to be emphasized via a monthly Webinar Series. The webinar topics change periodically but include the following list of popular topics: ECLIPSE Overview, LAGERS 101, LAGERS Payment Options, Separating from Employment and LAGERS Disability & Survivor Benefits. These webinars permit employers and employees to refresh their knowledge of LAGERS based upon specific topics of interest from the luxury of their own worksite or home.
The system’s financial strength is further exemplified through reductions in employer contribution rates, where 2 of 3 employer contribution rates are currently staying the same or declining during 2014. The system fully expects this trend of lower contribution rates to continue for the next couple of years. This pension contribution relief is greatly appreciated by not only the employers of the system, but the taxpayers in our valued communities as well.
As you read in the press, there definitely are examples of public pension funds in financial crisis, that IS NOT the case with LAGERS. The system was built on an extremely solid foundation 46 years ago and the actions of the board and staff continue to build on that foundation. I have been given the privilege of being a part of LAGERS for the past 26 years and I can attest that building on the solid foundation is an emphasis of every decision made. That is why LAGERS works for all stakeholders; thereby, “Getting it Right” for members, retirees, employers and taxpayers of Missouri.
Keith Hughes, CEBS, CGFM
LAGERS Executive Director
LAGERS Bill Would Allow for Administration of Local Pension Plans
December 17, 2013, updated January 9, 2014 --
LAGERS will be pursing legislation during the 2014 regular legislative session. House Bill 1044, sponsored by Representative Mike Leara and Senate Bill 675, sponsored by Senator Mike Kehoe, are two substantially similar bills that would amend LAGERS governing statutes to allow an employer of the system to petition the LAGERS Board to take on the administration of a previous retirement plan.
While LAGERS would not be actively pursuing agencies for this purpose, House Bill 1044 would provide employers with another option for pension administration, enabling them to focus on serving their communities.
This bill is anticipated to have no cost and even potential cost savings to local government agencies by effectively transitioning their legacy plan administration into LAGERS, thereby taking advantage of the expertise and efficiencies of scale of LAGERS.
Phone: 1-800-447-4334 Local: 573-636-9455 Fax: 573-636-9671 Email: email@example.com
701 West Main St. PO Box 1665 Jefferson City, MO 65102
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