Pension Plus & DC A
Changes that affect part-time students who were employed by a Michigan community college between July 1, 2014, and June 30, 2018, were recently signed into law. Your employer indicated that you are or were a part-time student employee who did not participate in the Michigan Public School Employees’ Retirement System. As a result, an account has been created for you with the retirement system and all your service hours during this period have been credited to your account.
When you were hired, you were eligible to participate in a retirement plan and were not given that choice. We now need you to tell us two things:
- Which plan you would like your service credited to, and
- Whether you wish to continue participating in the retirement plan while working at a community college that you’re attending as a part-time student.
The form mailed to you lets you answer both these important questions at one time.
If you worked at a community college before July 1, 2014, while attending as a part-time student, you also have an opportunity to add that employment to your retirement account by paying the contributions you would have paid as a member. Visit michigan.gov/ccstudents for more information.
Before you make this decision about opting in or out of the Michigan Public School Employees’ Retirement System, it’s important to consider a few key factors:
Frequently Asked Questions
<span class="btn btn-info">What is the Michigan Public School Employees' Retirement System?</span>
The Michigan Public School Employees’ Retirement System is a statewide public employee retirement plan. The role of the Office of Retirement Services (ORS) is to carefully manage the retirement system to preserve it for current and future retirees.
<span class="btn btn-info">You're a student now, but where do you see yourself in your future career? </span>
If you expect that your future career will lead you to work for one of our participating employers, you may want to opt in to participating in the retirement plan. The retirement plan at your community college will stay with you as you move into your future career if you are working for a Michigan public school or one of the employers who participate in this retirement plan. Careers in public schools include much more than teaching. In Michigan public schools you’ll find career opportunities in human resources, accounting, nursing, food service, nutrition, dietician, management, security, facility management, vehicle maintenance, cyber security, website administration, and technical support.
<span class="btn btn-info">Which employers participate in the Michigan Public School Employees' Retirement System?</span>
The employers who participate in this retirement plan include K-12 public school districts, select public school academies and charter schools, tax-supported community colleges, and intermediate school districts in Michigan.
<span class="btn btn-info">Why would I want to continue participating in the Michigan Public School Employees' Retirement System?</span>
If you choose to continue participating, you will have a choice between two retirement plans that can help you begin preparing for a secure financial future. Go to the Pick Your Plan website details about both plans.
<span class="btn btn-info">Why would I opt out?</span>
Saving for retirement is important but continuing in the Michigan Public School Employees’ Retirement System plan may not be the best option for you. You will be 50% vested for employer contributions to the Defined Contribution part of your plan after you’ve worked for two years and 100% vested after four years. If you don’t’ plan work for the community college or a public school in Michigan for two years, you may want to opt out of participating in the Michigan Public School Employees’ Retirement System plan. If you are planning to move out of Michigan and are not likely to return, opting out may be the best choice for you. Only employment at a participating employer will add to your benefit with the Michigan Public School Employees’ Retirement System.
<span class="btn btn-info">What is a pension? </span>
A pension is a guaranteed lifetime monthly payment in retirement. Pension income is separate from and in addition to any other retirement savings, such as a 401(k) plan, and your Social Security benefits.
<span class="btn btn-info">What is a defined benefit retirement plan? </span>
A defined benefit retirement plan provides a guaranteed lifetime pension payment in retirement based on a set formula. Pension payments are not affected by stock market ups and downs. You will qualify for a pension in retirement if you meet certain age and service requirements.
<span class="btn btn-info">What is a defined contribution retirement plan? </span>
A defined contribution plan is a retirement plan in which a certain percentage of earnings is set aside each year by the employer and the employee for the benefit of the employee. Employees choose how to invest their balances among the options provided in the plan. There are restrictions to when and how the employee can withdraw these funds without penalties. Money paid into the plan by the employer and the employee are invested in the State of Michigan 401(k) and 457 Plans.
<span class="btn btn-info">How do I qualify for a pension?</span>
If you choose to continue participating in the retirement system and you choose the Pension Plus plan, you will be eligible to receive a monthly pension when you reach the regular retirement age, currently set at age 60, when you have at least 10 years of service.
In addition to the pension, you’ll have income from the savings component. The amount of money you’ll have in your savings component when you retire depends on how much you and your employer pay in to the plan. Paying in enough to receive the full employer match is a good place to start. See the Voya Financial® website for information about the State of Michigan 401(k) and 457 accounts for public school employees.
Read more about the Pension Plus plan.
If you choose to continue participating in the retirement system and you choose the Defined Contribution plan, you won’t be eligible for a pension when you retire.
<span class="btn btn-info">What are years of service?</span>
Years of service are the years or fractions of years you work that count toward your pension under the Michigan Public School Employees’ Retirement System. Total years of service and age determine when you will qualify for a pension.
<span class="btn btn-info">If I qualify for a pension, how much will I receive each month?</span>
Your pension amount depends on how long you work and how much money you earn. Learn more about the pension formula and how to calculate your pension.
<span class="btn btn-info">How much will it cost me?</span>
Both the employer and employee retirement contributions for part-time student workers between July 1, 2014, and June 30, 2018, have been paid by your community college. Each community college is different; it is possible your community college will ask you to pay the employee portion of the cost. Please contact your community college for more details.
Your next step will be to choose between two retirement plans, the Pension Plus plan or the Defined Contribution plan.
Pension Plus offers two types of retirement plans in one: it pairs a pension component with a savings component. If you choose the Pension Plus retirement plan, you’ll make pretax contributions to the pension fund incrementally based on how much you earn from Michigan public school employment.
$0 to $5,000 – contribute 3 percent
$5,000.01 to $15,000 – contribute 3.6 percent
$15,000.01 and over – contribute 6.4 percent
For the savings component, if you have the Personal Healthcare Fund, you’ll pay 4 percent into your retirement investment account, which allows you to receive your employer’s full matching contributions to your retirement plan and Personal Healthcare Fund. Read more about your contributions to the Pension Plus plan.
If you choose the Defined Contribution Plan, you’ll be automatically enrolled at an 8 percent contribution rate to your retirement investment account, so you receive a full employer matching contribution to your retirement savings and the Personal Healthcare Fund.
Go to the Pick Your Plan website details about both plans.
<span class="btn btn-info">Will I have health insurance when I retire? </span>
You are automatically enrolled in the Personal Healthcare Fund, a portable, tax-deferred investment account that can be used to pay for healthcare expenses in retirement. Learn more about the Personal Healthcare Fund.
<span class="btn btn-info">What if I never qualify for a pension?</span>
If you never qualify for a pension, you can request a refund (or transfer your pension contributions and interest to another qualified retirement plan) at any time after you terminate. Retiree Healthcare Fund contributions are only refundable in certain situations. See Retiree Healthcare, Premium Subsidy for more information.
<span class="btn btn-info">What happens to the money in my 401(k) and 457 if I terminate employment?</span>
When you leave employment, you have several options for your retirement and healthcare savings. Read more at the Voya® website about your options when you leave employment.
<span class="btn btn-info">How do I make my choice?</span>
In the next couple of weeks, you’ll get a yellow envelope in the mail with the form you need to complete. You’ll also receive a white self-addressed stamped envelope. Complete the form and return it to ORS 5:00 p.m. EDT on June 28, 2019.
<span class="btn btn-info">Who do I contact if I have questions?</span>
If you have any questions about the decision you are making, visit michigan.gov/orsmiaccount and use our online Message Board for secure, direct access to our representatives. You can also contact our office by phone at 800-381-5111.
ORS has partnered with Voya® to bring you the savings component of your plan. Voya will help you invest your savings, provide you with account statements, track all contributions to your investment account, handle withdrawals and distributions from your account and provide other plan services. If you have any questions about the plan, contact Voya Financial® at 800-748-6128.
<span class="btn btn-info">Is there a deadline?</span>
ORS must receive your form no later than 5:00 p.m. EDT on June 28, 2019. By default, if ORS does not receive your form by the deadline, your choice to continue participating in the Michigan Public School Employees’ Retirement System as a part-time student employee will no longer be available.
<span class="btn btn-info">Where do I send the form?</span>
Fax the form to ORS at 517-284-4416.
Or mail the form to:
P.O. Box 30171
Lansing, MI 48909-7671
<span class="btn btn-info">What if I do nothing?</span>
If ORS does not receive your form by 5:00 p.m. EDT on June 28, 2019, you will no longer have a choice to continue participating in the Michigan Public School Employees’ Retirement System. Any future employment as a part-time student employee will not count toward a retirement benefit. Any service and contributions on account from your prior time will remain on account. Log in to miAccount at www.michigan.gov/orsmiaccount to view your retirement service, contributions and manage your account. Any contributions made to your State of Michigan 401(k) and 457 accounts from prior service will remain on account with Voya Financial®. To access your account balance with Voya, contact them at 800-748-6128.