Last Updated on March 2, 2023 by George
Disclaimer: If you use products or services based on our expert recommendations, we may receive a commission from the links in this post. Please take some time to read our Advertising Disclosure for more information.
Mississippi Teachers Retirement provides a secure and generous retirement for deserving educators. With competitive benefits, including health insurance plans and the ability to supplement retirement with additional savings through
Optional Retirement Plans, Mississippi Teachers Retirement offers a comprehensive solution for retired teachers and their families. Members can easily view account information online with an easy-to-use portal and access funds after 60 or later. Members should consider tax implications, limited investment options, and associated fees.
Missouri teachers are part of the Public School and Education Employee Retirement Systems (PSRS), established in 1946. The structure of Missouri’s teacher-defined benefit (DB) pension is similar to that in other states, rather than being determined by the contributions a teacher makes and those made on their behalf by the state or school district, which is invested in the market and a teacher’s pension wealth is controlled by private equity and hedge funds.
How are Teacher Pensions Calculated in Missouri?
In Missouri, a teacher’s pension wealth is calculated through a formula. The figure below illustrates how it is calculated; the state takes into account an educator’s highest average three consecutive years’ salary. For example, a teacher who has worked for 25 years with a final average pay of $70,000 would be qualified for an annual pension benefit equal to 62.5 percent of their last wage.
Calculating Teacher Pension Wealth in Missouri
2.5% Multiplier X Avg. Highest consecutive three years of salary X years of service
Who Qualifies for a Teacher Pension in Missouri?
In Missouri, teachers must serve several years before qualifying for a pension. This vesting period is five years. While educators qualify for assistance after five years of service, it may not be worth that much. Moreover, they can only start collecting it once the state’s retirement age is reached. The state sets specific windows in which teachers can retire with full benefits based on their age and years of experience. New teachers starting in Missouri can retire with their full benefits at:
65 years of age and five or more years of employment;
any age with a minimum of 30 years of experience; or
When the sum of their years of service and age is at least 80.
Moreover, Missouri permits early retirement after five years of experience at age 55 and any time after 25 years of service. However, teachers who choose that option will have their benefits cut depending on their years of experience and how soon they retire.
How Much Does Missouri’s Teacher Pension Plan Cost?
Teachers and employers must contribute to the Missouri Public School Retirement System (MPSRS) as they work. The state legislature set contribution rates that can change year-to-year; in 2018, teachers contributed 14.5 percent of their salary to the pension fund, and the state contributed 18.96 percent (2.94 percent of which was allocated to pay down the pension fund’s debt). Missouri’s teacher pension fund received 33.46 percent of teacher salaries. Unfortunately, unlike most other retirement plans, benefits from MPSRS are not portable. If teachers leave the system, they can only take their benefits if they continue teaching in another state. In other words, this lack of portability will reduce educators’ long-term retirement savings if they leave teaching or move across state lines for a job. As with all state pension funds, those who choose to stay with MPSRS for a more extended period will receive more significant benefits than others; thus, new and existing teachers should carefully consider their career plans considering how it interacts with the state pension system to ensure optimal retirement savings.
Glossary of Financial Terms
Vesting period
The minimum number of years a teacher must work to be qualified for a pension. Although vesting periods vary by state, they typically last five years. Every state allows teachers who quit their positions before they are vested to withdraw their contributions, sometimes with interest. However, just a few jurisdictions permit these workers to receive any employer contributions made on their behalf.
Employee contribution
The proportion of a teacher’s annual income paid to the pension fund.
Employer contribution
The proportion of a teacher’s annual income that the state, a school district, or both contribute to the pension fund.
Average cost
The annual retirement benefit expense expressed as a proportion of teacher pay. These costs do not include debt.
Amortization cost
A pension fund’s annual payment toward any unfunded liabilities. This may also be considered the pension fund’s debt service expense.
Frequently Asked Questions
How many years do you have to teach in Missouri to retire?
Teachers in Missouri who have reached the age of 65 and completed at least five years of service can retire with full benefits. Those younger than 65 but have served for at least 30 years may also be eligible to receive full benefits upon retirement. Additionally, any teacher with a combined age and years of service totaling at least 80 may qualify for full benefits.
Can I take my teacher’s pension at 55 and still work?
Teachers in Missouri over 55 can continue working while receiving a portion of their benefits. To be eligible, they must have experienced a reduction of at least 20% in pensionable earnings in the prior 12 months.
What is the average teacher retirement salary in Missouri?
Teachers in Missouri who are at least 60 years old and have completed at least five years of service can obtain full retirement benefits. Those younger than 60 but have served for a minimum of 30 years may be qualified to receive full retirement benefits. Additionally, anyone whose sum of age and years of service is equal to or more than 80 may receive full retirement benefits.
Pros & Cons
Pros                                                    
The Missouri Public School Retirement System (MPSRS) offers several advantages for teachers in the state.
Pros:
- Teachers can retire with full benefits after accumulating either five years of service at age 65, 30 years of service at any age, or when their combined age and years of service equal 80;
- Teachers who choose to retire early at age 55 with five years of experience or at any age with 25 years of experience will still receive reduced benefits;
- Employers and teachers both contribute to the pension fund; and
- The state contributes 2.94 percent to pay down the pension’s outstanding debt.
Cons                                                    
On the other hand, some downsides to MPSRS should be considered.
Cons:
- Benefits are not portable, meaning that if a teacher leaves or moves to another state, they can’t take the gifts with them;
- Only 14.5 percent of each teacher’s salary goes towards their benefits – the rest is to pay down debt for existing members; and
- Those who stay in teaching for extended periods will receive more significant retirement savings than those who don’t.
Final Thought – Missouri Teacher’s Retirement
In conclusion, the Missouri Public School Retirement System (MPSRS) offers several benefits for teachers in the state. Still, its lack of portability and relatively low contribution to teacher benefits makes it a less-than-ideal retirement plan.
Therefore, it is essential for new and current teachers in Missouri to carefully consider their career plans and how they interact with the state pension system to ensure optimal retirement savings.
Additional Read:
mississippi
montana
Related Post: