Employer Contribution Rates
Michigan Office of Retirement Services sent this bulletin at 02/28/2013 05:51 PM EST
February 28, 2013
Employer Contribution Rates
Dear Michigan School Business Official:
The contribution rates due on member’s wages paid between February 1, 2013, and September 30, 2013 are below. The rates apply to K-12 school districts, intermediate school districts, community colleges, district libraries, public school academies, and federal programs. The breakdown is as follows:
Revised - FY 2012-2013 Employer Contribution Rate - Effective February 1, 2013
|
Basic/MIP With Premium Subsidy |
Pension Plus With Premium Subsidy |
Pension Plus PHF |
Pension Plus to DC with PHF |
Basic/MIP to DC With Premium Subsidy |
Basic/MIP to DC With PHF |
Basic/MIP With PHF |
*DB Retirees Returned to Work |
*DC Retirees Returned to Work |
||
|
DB CONTRIBUTIONS |
||||||||||
|
PENSION CONTRIBUTIONS |
||||||||||
|
Pension Normal Cost |
2.43% |
2.24% |
2.24% |
0.00% |
0.00% |
0.00% |
2.43% |
0.00% |
0.00% |
|
|
Pension UAAL |
11.42% |
11.42% |
11.42% |
11.42% |
11.42% |
11.42% |
11.42% |
11.42% |
11.42% |
|
|
Pension Early Retirement Incentive |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
|
|
Pension Total Rate |
15.21% |
15.02% |
15.02% |
12.78% |
12.78% |
12.78% |
15.21% |
12.78% |
12.78% |
|
|
HEALTH CONTRIBUTIONS |
||||||||||
|
Health Normal Cost |
0.93% |
0.93% |
0.00% |
0.00% |
0.93% |
0.00% |
0.00% |
0.00% |
0.00% |
|
|
Health UAAL |
8.18% |
8.18% |
8.18% |
8.18% |
8.18% |
8.18% |
8.18% |
8.18% |
8.18% |
|
|
Health Total Rate |
9.11% |
9.11% |
8.18% |
8.18% |
9.11% |
8.18% |
8.18% |
8.18% |
8.18% |
|
|
DTL2 Records |
DB Contribution Total |
24.32% |
24.13% |
23.20% |
20.96% |
21.89% |
20.96% |
23.39% |
20.96% |
20.96% |
|
DC CONTRIBUTIONS |
||||||||||
|
DC Employer Contributions |
0.00% |
1.00% |
1.00% |
3.00% |
4.00% |
4.00% |
0.00% |
0.00% |
4.00% |
|
|
Personal Healthcare Fund |
0.00% |
0.00% |
2.00% |
2.00% |
0.00% |
2.00% |
2.00% |
0.00% |
0.00% |
|
|
DTL4 Records |
DC Contribution Total |
0.00% |
1.00% |
3.00% |
5.00% |
4.00% |
6.00% |
2.00% |
0.00% |
4.00% |
The contribution rates due on member’s wages paid between October 1, 2013 and September 30, 2014, are below. The rates apply to K-12 school districts, intermediate school districts, community colleges, district libraries, public school academies, and federal programs. The breakdown is as follows:
FY 2013-2014 Employer Contribution Rate - Effective October 1, 2013
|
Basic/MIP With Premium Subsidy |
Pension Plus With Premium Subsidy |
Pension Plus PHF |
Pension Plus to DC with PHF |
Basic/MIP to DC With Premium Subsidy |
Basic/MIP to DC With PHF |
Basic/MIP With PHF |
*DB Retirees Returned to Work |
*DC Retirees Returned to Work |
||
|
DB CONTRIBUTIONS |
||||||||||
|
PENSION CONTRIBUTIONS |
||||||||||
|
Pension Normal Cost |
2.90% |
2.67% |
2.67% |
0.00% |
0.00% |
0.00% |
2.90% |
0.00% |
0.00% |
|
|
Pension UAAL |
14.08% |
14.08% |
14.08% |
14.08% |
14.08% |
14.08% |
14.08% |
14.08% |
14.08% |
|
|
Pension Early Retirement Incentive |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
|
|
Pension Total Rate |
18.34% |
18.11% |
18.11% |
15.44% |
15.44% |
15.44% |
18.34% |
15.44% |
15.44% |
|
|
HEALTH CONTRIBUTIONS |
||||||||||
|
Health Normal Cost |
0.93% |
0.93% |
0.00% |
0.00% |
0.93% |
0.00% |
0.00% |
0.00% |
0.00% |
|
|
Health UAAL |
5.52% |
5.52% |
5.52% |
5.52% |
5.52% |
5.52% |
5.52% |
5.52% |
5.52% |
|
|
Health Total Rate |
6.45% |
6.45% |
5.52% |
5.52% |
6.45% |
5.52% |
5.52% |
5.52% |
5.52% |
|
|
DTL2 Records |
DB Contribution Total |
24.79% |
24.56% |
23.63% |
20.96% |
21.89% |
20.96% |
23.86% |
20.96% |
20.96% |
|
DC CONTRIBUTIONS |
||||||||||
|
DC Employer Contributions |
0.00% |
1.00% |
1.00% |
3.00% |
4.00% |
4.00% |
0.00% |
0.00% |
4.00% |
|
|
Personal Healthcare Fund |
0.00% |
0.00% |
2.00% |
2.00% |
0.00% |
2.00% |
2.00% |
0.00% |
0.00% |
|
|
DTL4 Records |
DC Contribution Total |
0.00% |
1.00% |
3.00% |
5.00% |
4.00% |
6.00% |
2.00% |
0.00% |
4.00% |
The contribution rates due on member’s wages paid between October 1, 2014 and September 30, 2015, are below. The rates apply to K-12 school districts, intermediate school districts, community colleges, district libraries, public school academies, and federal programs. The breakdown is as follows:
FY 2014-2015 Employer Contribution Rate - Effective October 1, 2014
|
Basic/MIP With Premium Subsidy |
Pension Plus With Premium Subsidy |
Pension Plus PHF |
Pension Plus to DC with PHF |
Basic/MIP to DC With Premium Subsidy |
Basic/MIP to DC With PHF |
Basic/MIP With PHF |
*DB Retirees Returned to Work |
*DC Retirees Returned to Work |
||
|
DB CONTRIBUTIONS |
||||||||||
|
PENSION CONTRIBUTIONS |
||||||||||
|
Pension Normal Cost |
4.31% |
3.23% |
3.23% |
0.00% |
0.00% |
0.00% |
4.31% |
0.00% |
0.00% |
|
|
Pension UAAL |
17.40% |
17.40% |
17.40% |
17.40% |
17.40% |
17.40% |
17.40% |
17.40% |
17.40% |
|
|
Pension Early Retirement Incentive |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
1.36% |
|
|
Pension Total Rate |
23.07% |
21.99% |
21.99% |
18.76% |
18.76% |
18.76% |
23.07% |
18.76% |
18.76% |
|
|
HEALTH CONTRIBUTIONS |
||||||||||
|
Health Normal Cost |
0.51% |
0.51% |
0.00% |
0.00% |
0.51% |
0.00% |
0.00% |
0.00% |
0.00% |
|
|
Health UAAL |
2.20% |
2.20% |
2.20% |
2.20% |
2.20% |
2.20% |
2.20% |
2.20% |
2.20% |
|
|
Health Total Rate |
2.71% |
2.71% |
2.20% |
2.20% |
2.71% |
2.20% |
2.20% |
2.20% |
2.20% |
|
|
DTL2 Records |
DB Contribution Total |
25.78% |
24.70% |
24.19% |
20.96% |
21.47% |
20.96% |
25.27% |
20.96% |
20.96% |
|
DC CONTRIBUTIONS |
||||||||||
|
DC Employer Contributions |
0.00% |
1.00% |
1.00% |
3.00% |
4.00% |
4.00% |
0.00% |
0.00% |
4.00% |
|
|
Personal Healthcare Fund |
0.00% |
0.00% |
2.00% |
2.00% |
0.00% |
2.00% |
2.00% |
0.00% |
0.00% |
|
|
DTL4 Records |
DC Contribution Total |
0.00% |
1.00% |
3.00% |
5.00% |
4.00% |
6.00% |
2.00% |
0.00% |
4.00% |
Please see below for a description of what each of these elements of the contribution rates entail. If you have any questions, please contact Steve Crippen at (517) 322-6857.
Pension Normal Cost: This portion of the contribution rate is determined each year by the retirement system’s actuary and is charged as a percentage due on payroll. This represents the cost of pensions for active employees earning another year of service credit in the retirement system.
Pension Unfunded Actuarial Accrued Liability (UAAL): This portion of the contribution rate is also determined each year by the retirement system’s actuary and is charged as a percentage of payroll. The UAAL is the difference between the retirement system’s assets and the pensions accrued (for past service) to current and future retirees. Each year, a payment is made against the UAAL reflecting the amortization payment and interest. NOTE: PA 300 of 2012 caps the combined pension and healthcare UAAL at 20.96 percent of payroll.
Early Retirement Incentive Program: According to the Public Act 300 of 2012, the pension incentive from 2010 must be paid for over ten years. The payments began in FY 2012-13. The payment rate as a percentage of payroll is listed above as part of the pension rate.
Health Normal Cost: This portion of the contribution rate is determined each year by the retirement system’s actuary and is charged as a percentage due on payroll. This represents the cost of pensions for active employees earning another year of service credit in the retirement system.
Health Unfunded Actuarial Accrued Liability (UAAL): This portion of the contribution rate is also determined each year by the retirement system’s actuary and is charged as a percentage of payroll. The UAAL is the difference between the retirement system’s assets and the health benefits accrued (for past service) to current and future retirees. Each year, a payment is made against the UAAL reflecting the amortization payment and interest. NOTE: PA 300 of 2012 caps the combined pension and healthcare UAAL at 20.96 percent of payroll.
*P.A. 464: Included are rates for retirees who return to employment under PA 464. These retirees are either former employees who retired as DB members or former employees who first converted to DC under PA 300 and 359 and then retired. Under PA 464, some retirees who return to work must be reported with employers making the UAAL portion of the contribution rate (20.96%). Employers must also make the DC contribution for the DC retirees who returned to work (4.0%). ORS has provided additional guidance on PA 464, available at the following link PA 464 Retirees Returning to Work.