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Termination vs. Effective Date

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Michigan Office of Retirement Services

Termination vs. Effective Date

Termination Date vs. Effective Date

When you apply to retire, you will input your anticipated termination date in step one when estimating your pension. Using miAccount, calculate your retirement effective date. If you input your anticipated retirement effective date into the termination date, miAccount will produce a pension effective date at least one month later than you anticipate. This could cause issues related to pension eligibility, and your insurance effective date just to name a few. 

Before applying to retire, become familiar with these definitions:

Termination date: In most cases this is the date the employee and the employer end their relationship; it's often your last day of work or paid leave. This can be any day or date in a month. Be aware, an employee on an approved leave of absence is considered terminated for retirement purposes on the date two years after the employer last reported service credit for the person. 

Retirement effective date: This is the first day of the month following the month in which you have satisfied all eligibility requirements and terminated employment. There are 12 effective dates (Jan. 1, Feb. 1, March 1, etc.). 

Things to know:

  • We will confirm your termination date with your employer. As long as the date is in the same month, no harm is caused if the date you enter when applying to retire is different than when you actually terminated.
  • You can select any day of a month to terminate your employment.
  • Employment contracts and summer pay do not prohibit you from selecting a termination date.
  • You must have a bona fide termination, meaning a complete severing of your employee-employer relationship, and you cannot have a promise of reemployment or a contract for future employment in place.

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