TREASURY - Employee Compensation

Two Options to qualify for EVIP/CIP – Employee Compensation Category:

Employee Compensation Plan Option

If electing to qualify using the Employee Compensation Plan Option, eligible local units must:

Certify to the Michigan Department of Treasury (using form #4888) that by June 1, 2013, they have developed an employee compensation plan, which they intend to implement, with any new, modified, or extended contract or employment agreement, for employees not covered under contract or employment agreement; and that the plan has been made available for public viewing in the clerk’s office or posted on a publicly accessible Internet site.
Submit a copy of their employee compensation plan to the Michigan Department of Treasury.

At a minimum the employee compensation plan shall include the following:

New hires who are eligible for retirement plans are placed on retirement plans that cap annual employer contributions at 10% of base salary for employees who are eligible for social security benefits. For employees who are not eligible for social security benefits, the annual employer contribution is capped at 16.2% of base salary.
For defined benefit pension plans, a maximum multiplier of 1.5% for all employees who are eligible for social security benefits, except, where postemployment health care is not provided, the maximum multiplier shall be 2.25%. For all employees who are not eligible for social security benefits, a maximum multiplier of 2.25%, except, where postemployment health care is not provided, the maximum multiplier shall be 3.0%.
For defined benefit pension plans, final average compensation for all employees is calculated using a minimum of 3 years of compensation and shall not include more than a total of 240 hours of paid leave. Overtime hours shall not be used in computing the final average compensation for an employee.
Health care premium costs for new hires shall include a minimum employee share of 20%; or, an employer’s share of the local health care plan costs shall be cost competitive with the new state preferred provider organization health plan, on a per employee basis.

Public Act 152 of 2011 Option

If electing to qualify using 2011 PA 152 option, eligible local units must:

Certify to the Michigan Department of Treasury (using form #4978) that by June 1, 2013, they are in compliance with 2011 PA 152; or certify they do not offer medical benefits to their employees or elected public officials.
Submit required supporting documentation to demonstrate compliance with 2011 PA 152, to the Michigan Department of Treasury.
- For 80/20, attach ANNUAL board resolution/meeting minutes showing majority vote of governing body for the medical benefit plan coverage year.
- For Annual Exemption for Calendar Year, attach ANNUAL board resolution/meeting minutes showing 2/3 vote of governing body for the medical benefit plan coverage year.

Contact Information

Office of Revenue and Tax Analysis
Phone: (517) 373-2697
Fax: (517) 335-3298
Email: TreasRevenueSharing@michigan.gov

http://www.michigan.gov/revenuesharing