The web Browser you are currently using is unsupported, and some features of this site may not work as intended. Please update to a modern browser such as Chrome, Firefox or Edge to experience all features Michigan.gov has to offer.
Your pension is based on the average of your two final years of total earnings before the DROP, called final average compensation or FAC, times 60 percent. This amount, divided by 12 is the monthly pension amount you will receive when your DROP period ends.
This pension amount is also used to calculate the value of your DROP account, based on your length of participation in the DROP. If your salary changes during your DROP period, ORS will not recalculate your DROP benefit.
While you are participating in the DROP, a percentage of your monthly retirement pension is credited to your account. This percentage is based on the length of your participation, which you designate on your Deferred Retirement Option Plan (DROP) Election and Application for Retirement (R0732H) form.
Your DROP account will earn three percent interest each year, prorated for any fraction of a year, as long as there is money in the account. At the end of your DROP period, you will have full access to your accumulated DROP balance, including interest.
The corresponding percentages are below.
|DROP PERIOD||PERCENT OF PENSION|
|Less than 1 year||30%|
|1 year but less than 2 years||50%|
|2 years but less than 3 years||60%|
|3 years but less than 4 years||70%|
|4 years but less than 5 years||80%|
|5 years but less than 6 years||90%|