Types of Service Credit
Rounding Out Your Retirement Plans
When your retirement application is processed, we forward your insurance information to the health, prescription drug, dental, and vision insurance carriers. You should receive insurance identification cards and materials a few weeks after your pension begins.
As a retiree, your state-sponsored life insurance continues for you and your dependents at no charge to you. Your coverage is 25 percent of the coverage you carried when you left work; your dependents' policies are capped at $1,000 each.
To view Long-Term Care Insurance (LTC) plan details, visit the Employee Benefits Division of the Michigan Civil Service Commission under Retiree Eligibility. If you previously enrolled in a state-sponsored LTCI plan with LifeSecure, Prudential or MetLife, you can call the vendor directly. For the LifeSecure Indiv
Eligible dependents for health, dental, and vision insurance plans include your spouse (as long as he or she is not also separately enrolled as an eligible state employee or retiree) and your unmarried children by birth, legal adoption, or full legal guardianship.
The Benefits for Life, the retiree-paid, optional coverage program offered through the state of Michigan offers you the opportunity to apply for coverage in key benefit areas. These offerings do not replace your state-sponsored benefit plans. Instead, the program offers additional financial protection with premiums payable through the convenience of pension deduction. Because the plans are optiona
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The retirement system is funded by employer and employee contributions and by the investment earnings on those contributions. All contributions are a funding source for pensions and healthcare, and they do not result in additional individual benefits.
When your pension payments begin, payments are first made from the personal contributions you paid into the system during your career. After these funds are exhausted, payments are made from the retirement system throughout the rest of your life.
Each year an actuary determines how much the State of Michigan needs to contribute to fund its portion of member benefits. These contributions are not refundable to you or your employer.
As an active contributing member of the Defined Benefit (DB) Plan, you also contribute 4% of your salary to the pension reserve fund.
Your DB pension contributions and employer contributions go into the reserve fund used to pay all monthly pensions, but we keep a separate account of your DB pension contributions. We do this for a couple of reasons:
Because we keep detailed account balances and provide them to plan members, they often think that they'll get this amount over and above their calculated pension when they retire. This is not so. It is only when you leave the system before you're eligible for a pension that DB pension contributions could be refunded. For more details, see Leaving State Employment.
As your employer forwards your DB pension contributions to the Michigan Office of Retirement Services, we credit your account. At the close of each fiscal year, we also credit you with interest on DB pension contributions on account for a full year. The interest rate on these contributions varies because it is statutorily determined each year based on the rate of investment return.
If you purchased service credit or have any post-tax contributions from years when the plan was contributory (before July 1, 1974, and after March 31, 2012), we will keep track of those DB pension contributions separately. These funds earn 3.5% interest after they have been on account for a full year. Interest is posted on Jan. 1 of each year.