This excludes any debt cost.Īmortization cost: The annual cost of a pension fund’s contribution toward any unfunded liabilities. Normal cost: The annual cost of retirement benefits as a percentage of teacher salary. In every state, a teacher who leaves prior to vesting is eligible to withdraw his or her own contributions, sometimes with interest, but few states allow those employees to collect any portion of the employer contributions made on their behalf.Įmployee contribution: The percent of a teacher’s salary that he or she pays annually to the pension fund.Įmployer contribution: The percent of a teacher’s salary that the state, school district, or a combination of the two pays annually to the pension fund. Although the length of vesting periods vary by state, 5 years is typical. Vesting period: The number of years a teacher must teach before becoming eligible to receive a pension. With that in mind, new and current teachers in Missouri should think carefully about their career plans and how they interact with the state's retirement plan. In other words, the lack of benefit portability will hurt the long-term retirement savings of any educator who leaves teaching altogether or who crosses state lines to work in another state.Īs with most state pension funds, Missouri’s teacher retirement system provides the greatest benefits to teachers who stay the longest, while leaving everyone else with inadequate benefits. As a result, someone who leaves teaching or who moves across state lines might have two pensions, but the sum of those two pensions is likely to be worth less than if they remained in one system for their entire career. This means that if a teacher leaves the MPSRS system, they can’t take their benefits with them, even if they continue working in the teaching profession. The remaining 16.02 percent state contribution is to pay down the pension fund's debt.įinally, in Missouri, as with most states, teacher pensions are not portable. While the full 14.5 percent of salary contributed by individual teachers is for benefits, the state contributes only 2.94 percent. However, not all of that investment goes toward benefits. In total, 33.46 percent of teacher salary was spent on Missouri's teacher pension fund. In 2018, teachers contributed 14.5 percent of their salary to the pension fund, while the state contributed 18.96 percent. Those contribution rates are set by the state legislature and can change year-to-year. How Much Does Missouri's Teacher Pension Plan Cost?Īs they work, teachers and their employers must contribute into the plan. However, teachers taking that option will have their benefits reduced based on their years of experience and how early they are retiring.
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