Reform Alert # 42 – Open Service Credit Billings May Expire Early Based on Member Election

Michigan Office of Retirement Services sent this bulletin at 01/09/2013 03:54 PM EST

MPSERS reform

January 9, 2013

Reform Alert # 42 – Open Service Credit Billings May Expire Early Based on Member Election

Depending on the retirement plan your employees elect during the MPSERS 2012 Reform, an open actuarial billing statement may expire earlier than the June 30, 2013, expiration date printed on the statement. If your employees’ election choice reduces their pension factor to 1.25% (Option 3 or Option 2, once they reach attainment), or if your employees select the Defined Contribution Plan, their billing statements will expire on their transition date. (See the table below to determine which election choices do not allow an employee to purchase service credit.)

The following actuarial service credit billings are affected:

Universal Buy-In
Parental Leave
State of Michigan Civil Service - Defined Contribution Service
Nonpublic Educational Service

If a member is requesting a Tax Deferred Payment Agreement for the following bills the expiration date will not change:

Out-of-System Public Educational Service Pre-1974
Out-of-System Public Educational Service Post-1974
Active Duty Military Service
Sabbatical Leave Pre-1981
Sabbatical Leave Post-1981
State of Michigan Civil Service - Defined Benefit Plan
Weekly Workers' Compensation

The Election Choice File will be located on the Employer Reporting Website and available on Friday, January 11, 2013. Log in and then from the Employer Home Page, click on MPSERS Status Details Page, then on MPSERS Status Details Page link again, and on Download Member Election Choice File. After you have reviewed the file, you will complete the TDP Agreement based on the information provided in the chart below. If the employee has an actuarial billing statement that has expired, he/she must request a new billing statement from ORS.

Option	Actuarial Billing Universal Buy-In Parental Leave SOM Civil Service – DC Service Nonpublic Education Service	Initiating a TDP Agreement	Pension Factor Changes
1 MIP 7% Basic 4%	No change. Current open billings are good until expiration date of June 30, 2013.	The member can initiate a TDP agreement if the agreement is signed by the member and the reporting unit on or before June 30, 2013.	Service credit purchases use a 1.5% pension factor.
2 (Before Attainment) MIP 7% Basic 4%	Current open billings are good until the expiration date of June 30, 2013, or the member reaches 30 years attainment, whichever comes first.	The member can initiate a TDP agreement if the agreement is signed by the member and reporting unit on or before June 30, 2013, or the member reaches 30 years attainment, whichever comes first.	Service credit purchased or entered into a TDP agreement before attainment uses a 1.5% pension factor.
2 (After Attainment) MIP Fixed MIP Graded MIP Plus Basic	Member must request a new billing statement. Beginning February 1, 2013, bills will be calculated using the new actuarial rates.	The member must request a new billing statement prior to initiating a TDP Agreement.	Service credit purchased or entered into a TDP agreement after the transition date uses a 1.25% pension factor.
3 MIP Fixed MIP Graded MIP Plus Basic	Current open billings are good until January 31, 2013. Beginning February 1, 2013, the member must request a new billing statement that will be calculated using the new actuarial rates.	The member can initiate a TDP agreement is signed by the member and the reporting unit on or before January 31, 2013.	Service credit purchased or entered into a TDP agreement before February 1, 2013, uses a 1.5% pension factor. Service credit purchased or entered into a TDP agreement on or after February 1, 2013, uses a 1.25% pension factor.
4 MIP DC Converted Basic DC Converted	Not eligible to make a service credit purchase after January 31, 2013.	The member is not eligible to initiate a TDP agreement.	Service credit purchased or entered into a TDP agreement before February 1, 2013 uses a 1.5% pension factor.

As soon as they are available, the new actuarial rates will be posted to the member website at www.michigan.gov/orsschools under Service Credit – Earning and Purchasing - Calculating Actuarial Cost.

Employees with current open Member Billing Statements were sent a letter informing them of these changes.

If you have any questions, please contact ORS_Web_Reporting@michigan.gov.

State of Michigan | Department of Technology, Management & Budget | Office of Retirement Services
P.O. Box 30171 | Lansing, MI 48909-7671 | www.michigan.gov/psru

Please do not reply to this email. This mailbox is not monitored and you will not receive a response. For assistance, contact ORS_Web_Reporting@michigan.gov.

The retirement plan information that appears in this email is intended to summarize basic provisions of Public Act 300 of 1980, as amended. Current laws, rates, and factors are subject to change. Should there be discrepancies between the information reflected here and the actual law, the provisions of the law govern.