State aid 27l(2) payments are reportable

Michigan Office of Retirement Services sent this bulletin at 01/23/2026 11:30 AM EST

Michigan’s State School Aid Act includes language in Section 27l that’s new for fiscal year 2026. Section 27l(2) of the act states that the funds are “to increase compensation for educators.” The statute defines “educator” broadly, including not only teachers but also paraprofessionals, counselors, bus drivers, and other school staff.

ORS has determined that the 27l(2) payments — which appear on your state aid report as “educator compensation 27l(2) payments”) — are reportable as compensation. Include these payments on both Detail 2 (DTL2) – Wage and Service and Detail 4 (DTL4) – DC Contribution records for all reportable employees who receive compensation derived from this money, regardless of the wage code used.

The Michigan Department of Education has posted information about the Educator Compensation program as well.

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.