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COVID-19 FAQs for State Employees

COVID-19 FAQs for State Employees

Frequently Asked Questions (last updated April 30, 2020)

CARES Act - Coronavirus Aid, Relief, and Economic Security Act

  1. Can I take a loan from my 401(k) or 457 Plans?

Until Sept. 22, 2020, you are eligible to take a one-time CARES Act loan from your 401(k) or 457 Plan account if:

  • You, your spouse, or a dependent has been diagnosed with coronavirus disease 2019 (COVID-19) using a Centers for Disease Control (CDC) approved test.

           or

  • You have experienced adverse financial consequences due to:
    • Being quarantined. 
    • Being furloughed or laid off. 
    • Having work hours reduced due to such virus or disease. 
    • Being unable to work due to lack of childcare due to such virus or disease. 
    • Closing or reducing hours of a business owned or operated by the individual due to such virus or disease.

 

  1. If I cannot afford my 401(k) or 457 Plan loan payments, what can I do?

You can defer your loan payments for up to 12 months on new one-time CARES Act loans, or previously existing loans that are due between now and the end of the year. Interest will continue to accrue during the delay period, which may increase the size of future scheduled payments if: 

  • You, your spouse, or a dependent has been diagnosed with coronavirus disease 2019 (COVID-19).

           or

  • You have experienced adverse financial consequences due to:
    • Being quarantined. 
    • Being furloughed or laid off. 
    • Having work hours reduced due to such virus or disease. 
    • Being unable to work due to lack of childcare due to such virus or disease. 
    • Closing or reducing hours of a business owned or operated by the individual due to such virus or disease.

 

  1. Can I stop my required minimum distribution (RMD) 401(k) and/or 457 payments?

Your RMD will be automatically suspended for 2020 unless you requested otherwise. You can return any RMD payments that have already been issued to Voya Financial through July 15, 2020.

 

 General

 

  1. Will the COVID-19 premium payment be included in my final average compensation (FAC)? 

This payment will be reportable income for your pension calculation, and your contributions will be withheld on your paycheck. The payment will be reported with all other reportable wages each pay period and be factored into determining your highest three consecutive years for your FAC calculation.

 

  1. If I am on a designated temporary layoff, am I still earning service credit? 

Yes. You will receive full service credit for required and designated temporary layoffs. Also, as of Oct. 1, 2003, you receive full service credit for furlough hours, and for participation in the banked leave time program.  

 

  1. If I am not being paid directly by the state (due to layoff, LTD, FMLA, or other reasons), can I still apply for retirement if I become old enough?

Yes. Retirement eligibility is based on your age as of your termination date of employment. While on a layoff or leave of absence, you are still considered a state employee.

 

  1. If I am on a designated temporary layoff, how will my FAC be affected? 

A regular full wage will be reported to ORS for the time you are on temporary layoff. As a result, the 4% employee contribution will be withheld on the reported wages. Your calculation will not be harmed if your highest three consecutive years of wages includes this temporary layoff period.

 

  1. If I am not being paid directly by the state (due to layoff, LTD, FMLA, or other reasons), can I access my funds at Voya?

Please contact Voya for your options. In general, if your employment has not been terminated, you cannot access your funds, but may have loan options available, possibly including expanded loan options under the CARES Act.

 

  1. If I am on a designated temporary layoff, will my 401(k) and 457 contributions continue?

The state's mandatory 4% contribution, as well as the 3% (and 2% for Personal Healthcare Fund participants) match will be based on what a full regular wage would have been for the period covered by the temporary layoff.

 

  1. If I am not being paid directly by the state (due to layoff, LTD, FMLA, or other reasons), what happens to my tax-deferred payment (TDP) agreement?

TDP payments cannot be made unless you are receiving a direct paycheck from the state. When you resume working/receiving direct payments, the TDP payments will also resume. Annual interest does continue to accrue on any outstanding balance. If you do not return to work, you will receive the service credit you have purchased and are not required to complete the entire purchase. However, if you are within 90 days of terminating your employment, you have the option to pay off/pay down the balance. Please visit our website to get more information.

 

  1. I'm a regular state employee with over 30 years of service, but I'm not age 55 yet. What happens if my employment ends now?

If you are not age eligible as of your termination date of employment, you will become a deferred member or former participant. Deferred benefit eligibility occurs at age 60.

 

  1. I've already applied for retirement and want to change my retirement effective date or cancel my application, what do I do?

Please log in to miAccount and send a Message Board using the Retirement Application category. Tell us what your new plans are for terminating employment, retirement effective date, and insurance start date. You can also click Apply for Retirement and edit each step of your online application, which would allow you to change more than just the effective dates. Be sure to submit the new checklist and any new required documents to our office.

 

  1. Is ORS still conducting retirement workshops?

No. We have transitioned to online workshops to meet you where you are, when your schedule allows. Our five-step Pre-Retirement Orientation presentation is available 24/7 for state employees in the Defined Benefit plan who are within five years of retirement. This electronic presentation covers the same topics as the previous in-person workshop. 

 

  1. Is ORS accepting office visitors for meetings at this time?

No.

 

  1. If state employees are encouraged to work from home, is anyone available to answer my questions?

There are customer service agents available to answer your questions Monday-Friday from 8:30 a.m.-5 p.m.

 

  1. I've heard in the news about the market declining. How does the decline affect my pension benefits?

With the recent fluctuations of the stock market we understand the concern about receiving your pension benefit. Please rest assured that the pension plans administered by ORS are guaranteed by the Michigan Constitution and are payable regardless of market conditions. You will receive your monthly pension benefits.

 

  1. I'm concerned that my 401(k) and/or 457 plan dropped due to the market conditions. Who can I talk to about my options?

Voya Financial manages your 401(k) or 457 plan. For more information, call the Plan Information Line at 800-748-6128 or go to Voya's website.

 

  1. How can I stay connected to what's going on at ORS?

To stay connected, please visit our website or Facebook page.