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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We recommend the following resources for help in estimating your pension. Online calculator: Pre-Retirement Orientation Seminars: |
Your first step in estimating your pension will always be to figure your final average compensation (FAC). Then you use the pension formula to figure your straight life calculation. Once you know your straight life amount, you have a basis for estimating an early reduced, survivor, and equated pension.
It's very important that you understand the concepts presented here before you make irrevocable selections you'll have to live with throughout your retirement. Once you're familiar with these fundamentals you can move on to the next section for step-by-step help in estimating your pension.
Your annual pension is based on a formula that multiplies your FAC under the Defined Benefit (DB) Plan by a pension factor times your years of credited service under the DB Plan.
Note: There are different pension formulas for covered employees and conservation officers. See more information.
If you're in the DB 30 or DB/DC Blend Plan, your FAC and years of service (YOS) are determined as of the date you switch to the Defined Contribution (DC) Plan for the purpose of your pension calculation. For members in the DB/DC Blend Plan, that date is March 31, 2012.
Your highest three consecutive years of compensation under the DB Plan are averaged to determine your FAC. If you are a conservation officer, your highest two consecutive years of compensation are used. See more details on the types of compensation used in your FAC.
Note: Your highest consecutive years of earnings may have occurred earlier in your career, however, we still refer to it as your FAC.
The pension factor for most state employees is 1.5% (0.015). Conservation officers and covered employees working with prisoners use a different factor and formula.
Your YOS reflects the years, or fractions of years, you have worked for the State of Michigan or one of its noncentral agencies under the DB Plan. You are credited with a full year if you work 2,080 regular hours; however, you may earn no more than 1 YOS credit in any given year.
Only regular, non-overtime hours are counted. Any work that is less than full-time or intermittent is evaluated using the regular hours worked converted to a fraction of a year. For example, if you work half-time you earn 0.5 YOS for each year of employment. (Exception: You are not considered part time if you work a shortened schedule due to Voluntary Plan A measures, mandatory furlough hours, or the banked leave time program hours. You'll get full credit.)
You may receive service credit for any military leave of absence or workers' compensation leave of absence that occurs during your state employment.
Credited service can also include any additional service credit purchased or transferred. For more information, see Adding to your Service.
The pension formula calculates your straight life pension. All calculations for pension payment options begin by figuring your straight life amount, which is adjusted depending upon which plan or option you are choosing. See more details on pension options.
When you begin receiving your pension, any DB pension contributions you paid into the retirement system are paid out first. For more information about this topic, read more about your contributions.
You must choose your payment option when you apply for your pension. After your retirement effective date, you will not be able to change your option or your designated survivor pension beneficiary. If you get married after you retire, you may be able to add your spouse to your insurance coverage.