The Minnesota State Retirement System (MSRS) pension plans' funding levels show improvement over the previous year's levels. Two factors contributed to the improvement:

• The 2010 Legislature adopted legislation proposed by MSRS to lower future liabilities (thereby, lowering our expenses); and
• A strong investment return of 23.3 percent as of June 30, 2011, along with the previous year's 15.8 percent return, has moved the funding levels of our four largest retirement plans in the right direction.

We will continue to monitor our financial situation and take proactive actions, if needed, to bring the pension plans administered by MSRS closer to full funding.

The 2012 Legislative Session is underway. The MSRS Board is not recommending any substantive changes to retirement benefits.

The Legislative Commission on Pensions and Retirement (LCPR) is scheduled to meet on Tuesday, January 31 and February 14, 2012. The agenda for the first meeting includes mostly bills carried over from the 2011 session, all having little or no impact on MSRS' general membership.

Legislative updates will be posted on our web site as they occur. We encourage you to visit the LCPR's web site at http://www.lcpr.leg.mn for upcoming meeting dates and topics.

• Form 1099-R will be mailed to you by January 31, 2012. This form reports taxable income you received during 2011 from a retirement plan administered by MSRS including your pension, Unclassified Retirement Plan, Minnesota Deferred Compensation Plan (MNDCP), or Hennepin County 1% Supplemental Plan. The form also reports any federal or state income taxes withheld. To ensure timely delivery of your 1099-R, please be sure to notify MSRS as soon as possible of any address change.
  
  
• Form 1099-R available online in early February: To view or download your 1099-R, log in to your Account Online (in the left navigation bar). If MNDCP, Unclassified Retirement Plan or Hennepin County: Once you have accessed your account online, you will find your 1099-R under the "My Mailbox" tab, then select "Tax Forms."
  
  
• Duplicate statements available: If you have not received your 1099-R by February 8, you may obtain a duplicate 1099-R on this website or by calling MSRS at 651-296-2761 or 1-800-657-5757.
  
  
• Health Care Savings Plan (HCSP). You will not receive a 1099-R for HCSP because it is a tax-free account. Contributions and reimbursements are not reportable on state or federal income tax returns. Exception: A 1099-R will be sent to a non-spouse, non-dependent beneficiary who received reimbursements from an inherited HCSP. Reimbursements to a non-spouse, non-dependent beneficiary are taxed as ordinary income.
  
  
• Public Safety Premium Withholding. Premiums withheld from your pension or MNDCP are not reported on a 1099-R. You will receive a separate letter indicating the premium amount withheld during 2011. If you have not received this letter by February 8, please contact MSRS at 651-296-2761 or 1-800-657-5757.

The Minnesota Deferred Compensation Plan (MNDCP) offers you the opportunity to save pre-tax dollars for retirement. Beginning in 2012, you will also have the option to save on an after-tax basis through Roth contributions. The Roth doesn't change how much you can contribute nor does it change where you can invest. It gives you more control over when your contributions - and retirement income - will be subject to income tax.

State of Minnesota employees will be able to contribute Roth after-tax dollars to their MNDCP account beginning January 2012. Other Minnesota public employers may or may not choose to offer this option or need more time to adjust their payroll procedures. Ask your employer if you will be able to make Roth contributions to your MNDCP account.

To learn more about the Roth option, please see Your guide to Roth 457(b) contributions. Use this guide to make informed decisions about your long-term savings goals. In the coming months, additional information such as online calculators will be available.