Missouri political subdivisions that are running their own pension plans have another option for plan administration.

 

How it Works

 

LAGERS can provide professional pension plan administration for Missouri's local governments that are currently running their own plans.  How we can help:

  • Provide an alternative solution for the administration of a frozen pension plan
  • Allow employers to reduce administrative costs 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 benefits to active employees and retirees under the frozen plan in accordance with the plan’s current governing documents

 

For an employer to become eligible to transfer their plan administration, they must first have frozen their pension 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.

Additional Resources

 

Eligibility

In order for a local government to choose LAGERS as its plan administrator, the local pension plan must be frozen, meaning no further plan provisions changes can be made, and no new employees will be enrolled in the local plan. All new employees would be enrolled into LAGERS.

 

If employees are not currently covered by LAGERS, the local government must elect to cover the future service of all employees or cover new hires under LAGERS.

 

In some instances, a local government may be able to convert all employee service, past and present, into LAGERS-covered service. This is only an option if LAGERS can offer substantially similar benefits so that employees are not disadvantaged in any way.

The Process

Each local pension plan is unique and will require special care and attention. LAGERS anticipates each plan conversion process to take several months to complete.

 

  • LAGERS' staff will complete an in-depth review of the local pension plan provisions, financial information, actuarial reports, and the most recent audit.

 

  • LAGERS Staff will identify any possible changes that will need to be made to the local plan document before moving forward.

 

  • The active members of the local plan must vote in favor of LAGERS administration by a simple majority.

 

  • The local pension board will recommend LAGERS administration of its pension plan to the governing body of the political subdivision.

 

  • The local governing body will pass a resolution to transfer administration of its pension plan to LAGERS.

How Much Will it Cost?

We at LAGERS believe we can provide high quality pension plan administration at a lower cost.  We plan to utilize our scale and expertise to keep costs as low as possible.

 

  • The local government will know all of the costs up-front before a decision is made to transfer administration of its pension plan to LAGERS.

 

  • There may be up-front fees for actuarial studies and/or changes to LAGERS' software.

 

  • There would be an annual administrative fee.

 

  • The full, monthly employer contribution would be required to ensure funding of the local plan stays on-track in trending toward 100% funding.

 

  • Unfunded liabilities of the local plan will be amortized over a period of years and will be paid via the required monthly contribution.

 

Questions?

Jeff Kempker, CEBS, CRC

Manager of Member Services

 

Email Jeff

 

Call Jeff at: 573-632-6371

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