PEERS New Member FAQs

Q. What is PEERS?
A. The Public Education Employee Retirement System of Missouri (PEERS), formerly the Non-Teacher School Employee Retirement System of Missouri (NTRS), is a defined benefit plan that provides disability and service retirement benefits to members, and benefits to qualified beneficiaries of deceased members. NTRS was created with the adoption of House Bill 88, which became effective October 13, 1965. PEERS is established as a corporate body and is not assigned to any department of state government. The PSRS/PEERS Board of Trustees is charged by law with the administration of PEERS. Changes to the law governing PEERS can be made only by an act of the Missouri Legislature.

Q. What is a defined benefit plan?
A. Retirement plans generally fall under one of two categories: Defined Benefit Plan or Defined Contribution Plan. A Defined Benefit (DB) Plan uses a definite formula by which member benefits are calculated. Normal benefits with PEERS are calculated based on a multiplier, your years of service credit, and your salaries. Once determined, the benefit is paid for life. The retirement plan assumes responsibility for investment decisions. In contrast, in a Defined Contribution Plan (DC), an individual’s benefit is based on the contributions made to the plan and the investment earnings. The individual who owns the DC plan makes the investment decisions. An individual may outlive the retirement funds available to them during retirement in a DC plan. An example of a DC plan is an Individual Retirement Account (IRA).

Q. Is membership in PEERS required?
A. Yes. PEERS membership is required, regardless of position, for non-certificated employees employed to work at least 20 hours per week on a regular basis by an employer within the Retirement System in a position that normally requires the employee to work at least 600 hours during the school term.

Q. What employers are covered by PEERS?
A. PEERS-covered employers include all Missouri public school districts, except those in the city of St. Louis and Kansas City, Missouri public two-year colleges that have elected to join, and non-profit educational associations that have elected to join.

Q. What are the advantages of being a PEERS member?
A. Upon attaining eligibility, members may receive lifetime monthly retirement benefits. Disability benefits are available to qualified members who become totally disabled before age 60. Benefits may be available to qualified beneficiaries if a member’s death occurs prior to retirement. Payment plans are also available for benefits to continue to a surviving beneficiary if a member’s death occurs after retirement.

Q. What is PSRS?
A. PSRS is also a Defined Benefit Plan administered by the PSRS/PEERS Board of Trustees. Its members include the certificated staff (teachers) of public school districts in Missouri (except those in the city of St. Louis and Kansas City), the public two-year colleges and statewide non-profit educational associations that have elected to join. PSRS and PEERS are separate entities and operate under separate state laws. A primary difference between the two is that PSRS is not covered by Social Security and PEERS is covered by Social Security.

Q. What is vesting and when am I vested?
A. Vesting establishes the right to a future retirement benefit without additional PEERS-covered service. You are vested once you acquire five years of creditable service with PEERS.

Q. What is the contribution rate and how is it set?
A. The contribution rate for the school year 2008-2009 is 6.25% for the employee and 6.25% for the employer. For example, if your eligible annual compensation is $12,000, your total retirement contributions withheld from your pay are $750 ($12,000 x 6.25%). Your employer also remits $750. The contribution rate is set each year by the PSRS/PEERS Board of Trustees based on the actuarial need.

Q. What is included in eligible compensation reported to PEERS?
A. Eligible compensation reported to PEERS consists of all earnings from PEERS-covered employers during the school year (July 1 – June 30), including extra duties, overloads and overtime. Also included is the amount your employer pays for your health, dental and vision insurance premiums. Example: Your earnings for the school year are $10,000. The health, dental and vision insurance premiums paid on you by your employer are $2,000. Your total compensation reported to PEERS is $12,000.

Q. When are my contributions credited to my account?
A. Contributions are credited to your account at the conclusion of the school year and upon completion of the PEERS audit process under the date of June 30. In the fall of every year, you will receive a Statement of Account. You can also view your account information on this Web site by clicking the link, "View Account Information" found at the top of this page.

Q. What happens to the employer’s matching contributions?
A. Employer contributions and investment earnings are held in a general reserve account and are used to pay monthly benefits to members and beneficiaries of deceased members. Employer’s matching contributions are not remitted specifically for you, are not credited to your account, and are not refundable to you, your beneficiary or your employer.

Q. What is the interest rate that I receive on my funds, and when is interest credited to my account?
A. The interest rate is set each year by the Board of Trustees. Interest is credited to your account only on June 30 and is calculated based on your previous June 30 balance.

Q. How do I earn service credit?
A. Credit is earned based on the percentage of actual salary received compared to the minimum annual salary you were expected to earn for the complete term of the position.

You may not earn more than 1.0 year of credit in any school year.

Q. What constitutes a school year?
A. July 1 through June 30 is a school year.

Q. What is a reinstatement or a purchase of service?
A. If you were a previous member of PEERS/NTRS and withdrew your funds, you may pay back the amount withdrawn and reinstate the years you forfeited. Several purchase provisions exist to allow members to buy service credit and allow them to vest or retire earlier and/or increase their benefit. Please refer to the Member Handbook and the section on “Purchasing and Reinstating Service Credit.”

Q. Does PEERS provide disability benefits?
A. PEERS provides benefits to vested members under age 60 who become permanently disabled while working in PEERS-covered employment and are subsequently unable to earn a livelihood in any occupation.

Q. May I borrow against my account?
A. No. The law does not permit partial withdrawal or loans.

Q. How does a divorce affect my PEERS benefit?
A. Missouri statute and case law state that PEERS funds hold the same status as funds of the federal Social Security Administration in a divorce action. Since current federal law does not allow the division of Social Security benefits in a divorce, PEERS funds also cannot be divided in a divorce. Upon a change in life status, including a divorce, benefits shall be paid in accordance with the statutory order of succession of beneficiaries, unless you file a new designation of beneficiary form with PEERS.

Q. What happens if I leave PEERS-covered employment before reaching retirement eligibility?
A. If your employment ends, you have the right to withdraw your contributions and interest in a lump-sum payment, in which case you forfeit your service credit and any rights to future benefits. If you have fewer than five years of credit (not vested), you can leave your funds with PEERS for the next five school years and receive interest. If you return to PEERS within the five-year period, you will continue with the same membership. If you do not earn any retirement credit within the five-year period, your membership terminates and you will be encouraged to withdraw your funds. Your funds do not accrue additional interest once your membership terminates. If you have five or more years of service credit (vested), you may leave your funds and they will continue to accrue interest. You may withdraw at any time or apply for lifetime monthly benefits when you reach retirement eligibility.

Q. Will I receive the employer matching contributions if I withdraw my funds in a lump sum?
A. No. You do not receive the employer’s matching contributions. These funds are only paid in the form of monthly benefits to retirees and qualified beneficiaries of deceased members.

Q. What happens to my PEERS account if I die before I retire?
A. Death benefits may be payable as:

1. A lump-sum refund of your account balance; or
2. The Option 2 retirement-based lifetime monthly payment to a qualified beneficiary.

It is very important that your beneficiary designations are kept up-to-date so benefits may be paid according to your wishes in the event you decease before retirement. Please refer to the section on Death Before Retirement found in your Member Handbook or contact PEERS for information on the conditions that must be met in order for your beneficiaries to receive these benefits.

Q. When am I eligible to receive a monthly retirement benefit and how is the amount calculated?
A. Please use our online Benefit Estimate Calculator.

Q. Will I pay into Social Security or Medicare while employed under PEERS?
A. Yes. PEERS members are also participating members of the federal Social Security and Medicare programs. Social Security taxes are currently 6.2% of your earnings, and Medicare taxes are currently 1.45% of your earnings.

Q. Will I be eligible to receive Social Security benefits and PEERS benefits?
A. With few exceptions, PEERS members with sufficient Social Security-covered employment should be eligible to receive full benefits from Social Security and Medicare. In limited cases, your Social Security benefit could be affected by other income sources defined by Social Security, such as railroad pensions or pensions from non-Social Security-covered employment (like PSRS). We recommend that you contact your local Social Security Office, the Social Security Administration at (800) 772-1213, or visit www.socialsecurity.gov for more information.

Q. At what age will Social Security and Medicare benefits begin?
A. Reduced Social Security benefits are available at age 62; the year full benefits begin is based on the year of your birth and no earlier than age 65. Medicare benefits begin at age 65 for most individuals.

Q. How can I get additional information on Social Security and Medicare?
A. Contact the Social Security Administration at (800) 772-1213 or visit the Web site,
www.socialsecurity.gov.