Changes to Michigan Public School Employee Retirement System SB 1040
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Changes to Michigan Public School Employee Retirement System SB 1040 As passed by the Senate and the House Committee 8/15/2012 *It is not intended to be interpreted as current law. GLP & Associates, Inc. and its affiliated companies do not provide legal or tax advice.
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Changes to Michigan Public School Employee Retirement System SB 1040 As passed by the Senate and the House Committee 8/15/2012 *It is not intended to be interpreted as current law. GLP & Associates, Inc. and its affiliated companies do not provide legal or tax advice. Action Taken. BASIC. - PowerPoint PPT Presentation
Transcript of Changes to Michigan Public School Employee Retirement System SB 1040
Changes to Michigan Public School Employee Retirement
System
SB 1040
As passed by the Senate and the House Committee 8/15/2012
*It is not intended to be interpreted as current law. GLP & Associates, Inc. and its affiliated
companies do not provide legal or tax advice.
ActionTaken
No Change
Maintain 1.5% Multiplier
Benefit FreezeOpt out pension(to)
Defined Contribution
BASIC
• 0% Contribution
• Years of Service through Dec. 2012 Multiplier = 1.5%
• Years of Service after Jan 1st, 2013 Multiplier = 1.25%
• Pay 4% of Salary
• 30 years of Service Multiplier = 1.5%
• After 30 years Multiplier = 1.25%
• Years of Service through Dec. 2012 Multiplier = 1.5% Deferred until age 60
• Jan. 1st 2013 – Flat employer contribution of 4% to DC
ActionTaken
No Change
Maintain 1.5% Multiplier
Benefit FreezeOpt out pension(to)
Defined Contribution
Opt in prior to July 1st 2008
M I P
• 3.9% Continues without change
• Years of Service through Dec 2012 Multiplier = 1.5%
• Years of Service after Jan 1st 2013 Multiplier = 1.25%
• Pay 7% of Salary
• 30 Years of Service Multiplier = 1.5%
• Over 30 years Multiplier = 1.25%
• Years of Service through Dec. 2012 Multiplier = 1.5% Deferred until age 60
• Jan. 1st 2013 – Flat employer contribution of 4% to DC
ActionTaken
No Change
Maintain 1.5% Multiplier
Benefit FreezeOpt out pension(to)
Defined Contribution
Start Date July 1st 2008
M I P Plus
• 6.4% Employee Contribution Continues
• Multiplier drops from 1.5% to 1.25% Jan 1st 2013
• Years of Service through Dec. 2012 Multiplier = 1.5% Deferred until age 60
• Jan. 1st 2013 – Flat employer contribution of 4% to DC
• Employee pays 7% of salary
• 30 Years of Service Multiplier = 1.5%
Over 30 Years of Service = 1.25%
ActionTaken
No Change
Maintain 1.5% Multiplier
Benefit FreezeOpt out pension(to)
Defined Contribution
July 1st 2010Pension Plus
• 6.4% Employee Contribution Continues
• Multiplier drops from 1.5% to 1.25% Jan 1st 2013
• DC Continues
• Employee pays 7% of salary
• 30 Years of Service Multiplier = 1.5%
• Over 30 Years of Service = 1.25%
• Years of Service through Dec. 2012 Multiplier = 1.5% Deferred until age 60
• Jan. 1st 2013 – Flat employer contribution of 4% to DC
Choice Between
1 - Pension Plus
2 – Defined Contribution with 50% match from employer, up to 6% of
salary.
EMPLOYEESNEWLY HIRED AFTER
9/4/2012
No retiree health insurance
It is replaced with 401(k) or 457 with a match up to 2% plus $1,000/$2,000 lump sum at retirement
•3% Contribution continues and goes to prefund retiree health care
•If employee not eligible for retiree health care at retirement, contributions are refunded monthly over 5 years after age 60
RETIREE HEALTHCARE FUND
•Opt out of 3% contributions and forego all retiree health care benefits to take 2% DC matching contributions
PERSONAL HEALTHCARE FUND
• Increase retiree health care premiums from 10% to 20% after Jan. 1st, 2013
• Cost stays the same if retiree is 65 or older as of Jan. 1st, 2013
REVISED MEDICAL COSTS
Questions, Comments, Suggestions Welcomed
Alex Kocoves
President & CEOGLP & Associates, Inc.
Michael McEvilly
Vice President of OperationsGLP Strategic Administrative Group, LLC
