New law changes benefit plans for new MPSERS members and existing DC participants

July 13, 2017

Today the governor signed into law Public Act 92 of 2017, which makes changes to the public school employees’ retirement plan. Please review our legislative summary of the new law. The full text of the law can be reviewed here.

ORS will provide detailed instruction and assistance to reporting units with all reporting changes required by the new law. All information regarding this legislation will be available in the next few days in a new section called 2017 Reform on the Employer Information website (www.michigan.gov/psru).

The two most urgent parts of the law for reporting units to understand are the following:

• Changes to DC employer contributions.  All DC participants who first worked on or after September 4, 2012 will have new contribution and employer match amounts mandated by the new law, as explained in the legislative summary. What this means for you now:
  
  
• Employees hired between now and October 1, 2017 must receive information regarding their plan options, including the current DC plan and the changes to that plan that go into effect on 10/1/17 (a 4% mandatory employer contribution) and 2/1/18 (changes to the employer matching contribution).
  
  
• An updated version of the Retirement Plan Election brochure and form (R0940C), which explains the current and future DC plans, is being printed and will be shipped to all reporting units. You should receive the new materials in 2 to 3 weeks, and should use them from now until 2/1/2018.
  
  
• Service Credit. Active employees who were first hired before July 1, 2010 will not be able to buy service credit after 5:00 p.m.  EDT on September 29, 2017. (See exceptions and details in the legislative summary.) What this means for you now:
  
  
• When a service credit purchase involves a tax-deferred payment (TDP) agreement, both the employee and the employer must sign. It is crucial that employers understand this deadline. You must fax all TDP agreements to ORS by 5:00 p.m. EDT on September 29. Fax TDP agreements as soon as you review and sign them to avoid a last-minute rush.
  
  
• Be prepared for a higher volume of requests for processing of TDP agreements in September. See chapter 10 of the Reporting Instruction Manual for more information about processing TDP agreements.
  
  
• Eligible members will receive letters from ORS informing them of their service credit purchase options. You can view these letters on the 2017 Reform section of the Employer Information website.

ORS will provide more detailed instructions regarding the implementation of PA 92 as it becomes available. If you have questions, please contact Employer Reporting at ORS_Web_Reporting@michigan.gov.