State of Michigan Service
|Glossary of Terms|
Note: Active members hired before July 1, 2010 and still participating in the defined benefit pension plan who intend to initiate a service credit purchase must ensure the full payment for the amount of service they wish to buy or a fully completed tax-deferred payment agreement is received in our office by 5:00 p.m. EDT,
As a member of the Michigan Public School Employees Retirement System in the Defined Benefit (DB) plan, you may receive retirement credit for the years you worked for the State of Michigan and were a member of the State Employees' Retirement System.
- You must purchase or transfer all of your prior service with the state. No partial credit can be received.
- Your purchase or transfer must be paid in full before any service credit will be granted.
- You must have an employer-employee relationship with a Michigan public school.
- You may use this service credit to satisfy vesting requirements.
- Any concurrent service in both the State of Michigan and Michigan public schools will be subject to the maximum limit of one year in the corresponding fiscal year.
- You must have terminated employment with the State of Michigan.
- For additional conditions, go to Adding to Your Service Credit.
The cost, if any, depends on when you performed the service and whether you were covered under the state's Defined Benefit (DB) retirement plan or Defined Contribution (DC) retirement plan.
DB plan service before July 1, 1974. If you were a DB plan member with service before July 1, 1974, your cost is based on your actual earnings in the state system and the contribution schedule in effect at that time in the Michigan Public Schools Retirement System. In addition, interest is charged for each year that has elapsed since you performed the service. If your contributions and accrued interest remain in the state's DB plan, these funds will be applied to your cost and your Member Billing Statement will reflect only the balance due. We will calculate the cost for you if you submit an application (you will not be obligated to buy).
DB plan service on or after July 1, 1974. If you were a DB plan member, there is no cost for your state service earned from July 1, 1974, through December 31, 1986. For service performed on or after January 1, 1987, your cost as a MIP member is 1.5 percent of any state wages received after that date, plus 8 percent interest is charged for each year that has elapsed since you performed the service. If your State of Michigan service includes purchases that are creditable in the Michigan Public Schools Retirement System, these purchases may be transferred, however, additional costs may apply. We will calculate the cost for you if you submit an application (you will not be obligated to buy).
DC plan service. Your cost is the actuarial rate in effect at the time of payment. The highest previous fiscal year earnings used to determine your actuarial percentage may be your school earnings, your state earnings, or, if higher, a combination of the two. Part-time wages will be equated to full-time. Click here to learn how to calculate actuarial cost.
Submit an Application for State of Michigan Service (R0317C). Follow the directions provided on the form. For more information on purchasing service credit, see How to Purchase Service Credit.