Effective Jan. 1, 2025, the interest rate charged on late payments will be 6%.
The interest rate 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 most recent calculated actuarial rate of return was 4.98%.
Delinquent payments are a serious matter. The Michigan Office of Retirement Services (ORS) closely monitors reporting units (RUs) in Defined Benefit (DB) and/or Defined Contribution (DC) shortfall. RUs that repeatedly miss payments or make incomplete payments are at risk for increasing penalties.
On the 7th business day from the report end date, review the employer statement balance due. Ensure payments are made in full and on time to avoid a daily (including weekends and holidays) interest assessment on the delinquent balance.
See the Reporting Instruction Manual (RIM), sections 8.02.02: Late payment fees and interest charges and 7.00.01 Payroll calendars and due dates for more information.
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 On Jan. 1, 2025, dates from 2024 will no longer be available on the Period End Date drop-down menu on your Enter Payment Information screen.
After Jan. 1, 2025, when you’re making a payment, you will see only 2025 dates. If you need to make a payment for a 2024 report, please select the earliest date available on your drop-down menu.
The IRS determines limits to how much employees can contribute to a qualified plan each calendar year. The limits for 2025 are posted on the Voya Financial website.
ORS calculates up to the yearly IRS contribution limit ($23,000 in 2024) using the employee contributions reported to ORS only. Once the annual IRS limit has been reached, 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 reached for members of the DC Plan.
If your RU offers a deferred compensation plan outside the State of Michigan 401(k) and 457 Plans, your employees and RU are responsible for monitoring the IRS limits made collectively to all 457 plans you offer.
You may save work for your RU by monitoring amounts contributed to plans you offer. Any amount the employer withheld over the IRS limit needs to be refunded to the employee.
In preparation for the 2025 Small Steps campaign, a comprehensive list of your RU’s employees with a DC component is now available upon request by emailing us at ORS_Web_Reporting@Michigan.gov.
Please use the subject line Small Steps list in your email.
Using the list you receive, please complete the following in preparation for the campaign. Note: The deferral rates on your list are as of Oct. 15, 2024. The list you receive is not final and is for reference only.
- Begin to clean up your feedback file before the Small Steps campaign begins. For instructions on how to do that, refer to the RIM, section 7.04.01: View DC Feedback File.
- Complete a Detail 4 (DTL4) termination record for each employee on the list that no longer works for your RU. Refer to the RIM, section 7.04.02: Reporting a terminated employee on a DTL4 record for instructions about submitting the required DTL4 record.
- Verify Social Security numbers (SSNs) are correct. Contact ORS with any SSN issues or corrections before taking any action.
As part of the Small Steps campaign, employees in the Pension Plus Plan, Pension Plus 2 Plan, DC Plan, or the Personal Healthcare Fund who are not contributing at least 15% to their State of Michigan 457 Plan in mid-December received a mailer from Voya about their contribution rates.
A final comprehensive list of employees with a DC component will be included on the View DC Feedback File at the end of February.
If you have any questions related to reporting, email Employer Reporting at ORS_Web_Reporting@Michigan.gov.
The mailer for the award-winning Small Steps annual increase program was sent to participants earlier this month. This campaign increases participants’ contributions to the State of Michigan 401(k) and 457 Plans by 1% each year until they reach the target savings rate of 15% of their wages. Participants who wish to decline the increase must do so using the opt out website.
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