This year’s Small Steps campaign will take effect on the first available pay period in March 2022. This will avoid the holiday processing and make for a smoother process for your reporting unit.
A mailing will be sent out to applicable employees in mid-December regarding the campaign, which will include their opt-out code. The campaign includes employees in the Pension Plus, Pension Plus 2, DC, and those with the Personal Healthcare Fund (PHF). No additional notices will be sent to employees after this, so please inform your employees to keep this mailing. View the Small Steps campaign mailer.
(Correction: An earlier version of the article incorrectly reported the effective date.)
Professional services leave (PSL) is when a public school employee leaves his or her normally assigned duties to work in a position for an employee organization or union on a part-time or full-time basis. The public school employee has a contract renewed annually with the employee organization/union for this role.
Professional services released time (PSRT) is when a public school employee is released from his or her normally assigned duties to handle employment matters for an employee organization or union.
For PSL and PSRT, reporting units must collect employer contributions from the employee organization group or unions which are paid to the retirement system for member's performing PSL or PSRT.
See the RIM section 3.02.05: Professional Services Leave/Professional Services Released Time and/or section 7.17.01: How to Report Professional Services Leave/Professional Services Released Time for more information. If you have questions about whether specific situations are considered to be PSL or PSRT, please email the web reporting team at ORS_Web_Reporting@michigan.gov.
The Closing Agreement with the IRS is now finalized. It documents the IRS ruling that the retiree healthcare contributions are exempt from federal income and FICA taxes. More than 500 reporting units participated in the agreement, and their tax status is improved by the ruling.
Final MPSERS Closing Agreement
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Effective Jan. 1, 2022, the interest rate charged on late payments will be 6%.
The rate of interest charged on any late contribution payment is determined by the actuarial rate of return from the prior year’s investments, less 2%; however, the rate cannot be less than 6%. The rate fluctuates annually at the beginning of the calendar year. The most recent calculated actuarial rate of return was 6.80% which means the shortfall interest rate will be the minimum 6%.
Delinquencies of any amount are a serious matter. Reporting units in shortfall are monitored closely by ORS Employer Reporting. Reporting units that repeatedly miss payments or make incomplete payments are at risk for increasing penalties. Check the statement balance due each pay cycle, then make payments in full and on time to avoid a daily (including weekends and holidays) assessment of interest on the delinquent balance.
For the legal requirements regarding late fees and interest, see Public Act 300 of 1980, specifically MCL 38.1342(7).
The Reporting Instruction Manual (RIM), section 8.02.02: Late Payment Fees, also offers further information on this topic. If you have more questions, contact us at ORS_Web_Reporting@michigan.gov.
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IRS determines limits to how much employees can contribute to a plan each calendar year. You can find limits for 2021 here.
ORS calculates up to the yearly IRS contribution limit using the contributions reported to ORS only. Once the IRS limit has been hit, column AZ on the download detail will indicate “YES”. ORS will only charge for the 4% mandatory employer DC contribution rate after the IRS limit has been hit.
If your reporting unit offers a deferred compensation plan outside the State of Michigan 401(k) and 457 Plans, your employee and reporting unit are responsible for monitoring the IRS limits made collectively to all 457 plans you offer.
You may save work for your reporting unit by monitoring amounts contributed to plans you offer. Any amount the employer withheld over the IRS limit needs to be refunded to the employee.
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