Public Act (PA) 147 of 2023 was signed into law Oct. 10, 2023. The FAQs below outline its impacts.
This means that there is a complete severing of the employer-employee relationship. You cannot work in a Michigan public school reporting unit during the month of your retirement effective date, even as a volunteer. You cannot have a promise of reemployment or a contract for future employment in place to work for a Michigan public school reporting unit before you terminate employment and begin collecting a pension.
1. When can I return to work at a Michigan public school reporting unit with no effect on my retirement benefits and no earnings limit? (For everyone other than a superintendent. See rules below for superintendents.)
You may return to work at a reporting unit in any position — either directly or indirectly — with no earnings limit and no effect on your pension or insurance premium subsidy if you have a bona fide termination and you’ve been retired at least six consecutive months.
These rules will be in effect until Oct. 10, 2028.
2. What if I return to work at a reporting unit before I’ve been retired six consecutive months?
You may return to work at a reporting unit — either directly or indirectly — with no effect on your pension or insurance premium subsidy if:
If you retired as a superintendent, see the next question. These rules will be in effect until Oct. 10, 2028.
3. When can a retired superintendent return to work at a public school reporting unit?
Retired superintendents may return to work — either directly or indirectly — with no effect on their pension or insurance premium subsidy if:
OR
These rules will be in effect until Oct. 10, 2028.
4. Is the retiree earnings limit of $15,100 based on my gross earnings or net earnings?
The earnings limit of $15,100 in a calendar year is based on your gross earnings from your public school employment as a retiree.
5. What if I earn more than the $15,100 earnings limit in a calendar year?
You will temporarily forfeit your pension and insurance premium subsidy until you terminate your public school employment.
6. What if I’m a retired superintendent who returns to work at a reporting unit as a superintendent before I've been retired six months, even if it’s at a different reporting unit?
You will temporarily forfeit your pension and insurance premium subsidy until you terminate your public school employment. The Michigan Office of Retirement Services (ORS) would be able to reinstate your pension and insurance subsidy on the first of the month following your termination of employment. Note: When you terminate employment, the six months clock will start over.
7. What does it mean to be employed directly or indirectly?
Directly means you were hired directly by the school. Indirectly means you were hired through a third party or as an independent contractor.
8. PA 147 of 2023 says I must be retired at least six consecutive months in order to have no earnings limit when I return to work at a Michigan public school reporting unit. Six months, beginning when?
The six months begins from your retirement effective date. However, if you return to work at a reporting unit before you've been retired six consecutive months and you exceed the earnings limit, the six consecutive months clock will start over when you terminate your employment as a retiree. It will not resume from your retirement effective date.
For example, you have a retirement effective date of Dec. 1, 2023, and you return to work at a reporting unit in February 2024 and you earn more than $15,100 in a calendar year from your public school employment. If you terminate employment June 15, 2024, you will have to be retired six consecutive months from June 15, 2024, to return to work at a reporting unit with no earnings limit and no impact on your pension and insurance premium subsidy.
9. What is my earnings limit if I return to work after I have been retired for a full six consecutive months?
There is no earnings limit, whether you work at a Michigan public school reporting unit or outside a Michigan public school reporting unit.
10. I returned to work within the first six months of retirement, but I didn’t earn $15,100 in a calendar year from my public school employment. Since I stayed under the $15,100 earnings limit and it’s been longer than six months since my retirement, am I subject to an earnings limit?
No, you will no longer be subject to an earnings limit since you stayed under the $15,100 earnings limit during the six months of post-retirement employment. You will no longer be subject to any earnings limit once you have reached at least six months since your retirement date.
11. When did PA 147 of 2023 take effect?
PA 147 of 2023 took effect Oct. 10, 2023.
12. When PA 147 of 2023 went into effect, I was working at a reporting unit as a retiree. What does this mean for me?
Retirees who are working at a reporting unit when PA 147 of 2023 went into effect will be subject to the new working after retirement rules.
13. Can I return to work at a reporting unit with no effect on my pension and insurance premium subsidy and no earnings limit before I've been retired six consecutive months if I work indirectly through a third party or as an independent contractor?
No. If you return to work — either directly or indirectly — before you've been retired six consecutive months you can only earn $15,100 in a calendar year as a retiree from your public school employment. If you earn more than that, you will temporarily forfeit your pension and insurance premium subsidy. This means if you're receiving an insurance premium subsidy, you will have to pay the entire insurance premium until you end your employment at the reporting unit. In order to reinstate your pension or your insurance subsidy, you would have to terminate your employment with the reporting unit. Have the reporting unit send notification of the termination to ORS, listing the date your employment with them was terminated.
Also, if you return to work before you've been retired six consecutive months, the six consecutive months clock will start over when you terminate your employment as a retiree. It will not resume from your retirement effective date.
14. What if I return to work at a Michigan public school reporting unit without a bona fide termination?
If you’re collecting your pension and it's subsequently discovered that a bona fide termination did not exist, you will be required to repay pension payments you received in error. In addition, you will be disenrolled from insurance, going back to your retirement effective date. Any medical costs you incurred after that date will be your responsibility.
15. My pension and insurance premium subsidy were suspended because I returned to work before I was retired nine consecutive months, under the rules outlined in PA 184 of 2022. Will my pension and subsidy be reinstated under PA 147 of 2023?
PA 147 of 2023 supersedes some rules of PA 184 of 2022 and adds an earnings limit for retirees returning to work before they have been retired six consecutive months. If you returned to work after six consecutive months but before nine consecutive months from your retirement date, ORS will reinstate your pension and subsidy. If you returned to work before you were retired for six consecutive months, ORS will determine the amount of money you’ve earned so far this calendar year. If you’ve earned less than $15,100 as a retiree from your employment with the reporting units, ORS will automatically resume your pension and insurance subsidy. If you’ve earned more than $15,100 this calendar year from your public school employment as a retiree, your pension and insurance premium subsidy will remain temporarily forfeited.
16. How do I know how much I’ve earned this calendar year?
There is a delay between when you earn your wages and when your employer reports those wages to us. The best way to find out how much you’ve earned this calendar year is to check your last pay stub.
17. I’m currently working at a reporting unit as a retiree and I haven’t been retired at least six consecutive months. Does the income I’ve earned so far from my public school employment this calendar year count toward my $15,100 earnings limit?
Yes, the wages you’ve earned as a retiree at a public school so far this year, starting from Jan. 1, 2023, count toward the $15,100 earnings limit. For example, if you’ve already earned $10,000 from your public school employment as a retiree this calendar year, you can earn $5,100 by Dec. 31, 2023. If you earn more than $15,100 as a retiree at a public school this calendar year, you will temporarily forfeit your pension and insurance premium subsidy.
18. My pension and insurance premium subsidy were suspended. During that time, I remained enrolled in the retirement system's insurance, and I paid the full premium. Do I need to do anything?
ORS will automatically adjust your premium to reflect your insurance premium subsidy if your retirement benefits resume under PA 147 of 2023.
19. My pension and insurance premium subsidy were suspended. During that time, I wasn't enrolled in the retirement system's insurance, or I was enrolled but canceled my coverage. What do I need to do to enroll in the retirement system's insurance?
You can make changes to your insurance enrollment online using miAccount.
Once you're logged in to miAccount, go to the Insurance Coverage tab and follow the prompts on each page. Be sure to save your changes when you're finished. Once you have saved these changes, you will receive a confirmation page. Print a copy of the confirmation page and send it along with any necessary proofs to:
Michigan Office of Retirement Services
PO Box 30171
Lansing, MI 48909-7671
Please see Dependent Coverage for proofs needed for dependents.
Or you may complete and submit the Insurance Enrollment/Change Request (R0452C) form, along with any required proofs, to ORS.
You must have a qualifying event to enroll in the insurances without a six-month waiting period. The passage of PA 147 of 2023 is considered a qualifying event. ORS must receive your completed application and proofs within 30 days of the qualifying event, which would be 30 days from the date Gov. Whitmer signed it into law. Your coverage can begin as early as the first of the month after you apply, and we receive the required proofs.
For retirees with Medicare, your coverage can begin the first of the second month after we receive your request and required proofs.
If you do not meet this time frame, your insurance coverage will begin the first day of the sixth month from the date we received your completed application and proofs.
20. Can I volunteer at a Michigan public school reporting unit during my first six months of retirement?
Retirees must have a bona fide termination. This includes not volunteering at a Michigan public school reporting unit during the month of your retirement effective date. There is nothing that prohibits volunteering after a true bona fide termination.
If you return to a Michigan public school reporting unit as a volunteer at the same district you retired from before six consecutive months of retirement, doing the same or similar job to the one you left, this brings into question whether a bona fide termination existed. Especially if you are reemployed after six months, a bona fide termination would be in doubt.
If ORS later discovers that there was no bona fide termination, you will be required to repay pension payments you received in error. In addition, you will be disenrolled from insurance retroactive to your retirement effective date. Any medical costs you incurred during this time will be your responsibility. The amount owed back to the retirement system for pension and insurance premiums may be significant depending on how long you received your pension in error.
A volunteer is someone who is not paid and/or would not receive remuneration for their services at any time. ORS cannot speak to district and union rules surrounding volunteering in a position that is typically a paid position.
21. I am currently employed at a Michigan public school reporting unit, and I'm also currently employed and providing service to a public school either as an independent contractor or through a third party. When I retire from my Michigan public school reporting unit position, will I have to quit my other job for six months in order to draw my retirement benefits?
If, as of Oct. 10, 2023, you were already “dually employed” as both an active member in the Michigan Public School Employees' Retirement System and in a position that provides service to a public school, either as an independent contractor or through a third party, you could retire and collect your retirement benefits immediately while continuing to work in your third party position as long as you have been continuously employed in the same manner as you were on Oct. 10 , 2023.
Here are some examples:
1. What universities participate in the Michigan Public School Employees' Retirement System?
Central Michigan, Eastern Michigan, Northern Michigan, Western Michigan, Ferris State, Lake Superior State, and Michigan Technological universities are limited participants in the Michigan Public School Employees' Retirement System only for those employees hired before Jan. 1, 1996. These universities no longer participate for employees hired after that date.
2. What is a bona fide termination?
A bona fide termination means that you have completely severed the employer-employee relationship with your Michigan public school reporting unit employer. This includes that you do not work for a reporting unit during the month of your retirement effective date and that you do not intend or expect to have an offer or contingency to become employed at any reporting unit.
3. When can I become employed by a university and still receive a retirement allowance?
If you worked anywhere else but at one of the seven universities, you may work at one of the universities immediately after you leave Michigan public school employment.
Example: Bob retires from Marquette Public Schools and has never worked for a university. He could work for any of the seven universities immediately after retiring with no impact to his pension or insurance premium subsidy.
4. I once worked at one of the seven universities after Jan. 1, 1996, but then stopped working there and worked at a public school for the remainder of my career. May I work at a university immediately after retiring with no effect on my pension or insurance premium subsidy?
Yes. If you worked at a university after Jan. 1, 1996, that service is not considered as part of your pension calculation. You may work at one of the seven universities with no effect to your pension or insurance premium subsidy.
Example 1: Judy retires from a Michigan K-12 public school. Years ago, she worked for one of the seven universities. She could immediately work at one of the seven universities with no effect on either her pension or insurance premium subsidy.
Example 2: Greg retires from Detroit Public Schools and is also employed at Eastern Michigan University (EMU) where he was hired after Jan. 1, 1996. Greg does not need a bona fide termination with EMU and can remain employed at EMU and still collect a pension for his work at Detroit Public Schools. Greg would need a bona fide termination from Detroit Public Schools and will need to wait at least six months before returning to any other reporting unit that is not a university.
Example 3: Zee works at Northern Michigan University and was hired by them before Jan. 1, 1996. She plans to retire from Northern Michigan University in December 2023. Zee will need to have a bona fide termination with Northern Michigan University and wait six consecutive months before she can take a job with any K-12 reporting unit or community college, without having an earnings limit. Zee could take a job at one of the seven universities if she had a bona fide termination of employment when she retired.
Example 4: Charlotte retires with a bona fide termination from Ferris State University (FSU), which includes not working for FSU during the month of her retirement effective date. She could then work for any one of the universities, including FSU, with no impact to her pension and premium subsidy.
PA 147 of 2023 did not change the working after retirement rules for those receiving a disability pension. You still must gain approval from ORS before you return to work for any employer. Please send ORS a letter and include the official position description with your potential employer. The position description should include a complete description of the type of work you will provide the employer. Please also list the number of hours you plan to work, and any contact information for this employer.
If you fail to gain ORS approval in advance, your disability pension may be terminated.
If you're under 60 years old:
If you’re 60 or older:
