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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A qualified plan-to-plan transfer is the process of moving money from a qualified (as defined by the IRS) pretax investment account/retirement plan to another qualified plan without incurring taxes or penalties on the money being transferred.
This means you can "roll over" money from most pretax retirement accounts and use it to purchase service credit. A qualified plan includes a 401(a), 401(k), 403(b), 457, as well as conduit individual retirement accounts (IRAs) from these sources. A traditional IRA cannot be used to purchase service credit. Your deferred compensation 401(k) and 457 plans are qualified retirement plans.
If you decide to purchase any or all of the service credit shown on your member billing statement by transferring money from a qualified plan, download a Qualified Plan-to-Plan Transfer Certification (R0158X) form.
This form includes detailed instructions on how to initiate a plan-to-plan transfer. Complete and return it to the Michigan Office of Retirement Services (ORS) so that we know the dollar amount you intend to transfer to purchase service credit. It is then your responsibility to arrange with your plan administrator to send the payment directly to ORS, following the instructions on the form.
All you need to do is send your plan administrator a copy of the transfer certification form along with a copy of your member billing statement to initiate the transfer. The transfer usually takes two to three weeks and is sent directly to ORS.
Be sure to allow ample time for your plan administrator to transfer the funds. Some financial institutions take several weeks, or even months. It is important that we receive your payment before the due date on the member billing statement. If the transfer arrives after the due date, you will have to request a new billing statement with a recalculated purchase cost. In addition, we must receive payment by your termination date. If payment is not received by then, your payment will be returned to you and service will not be credited.
When ORS receives your qualified plan-to-plan transfer payment, you'll be issued a receipt and your retirement account will be updated with your service credit purchase.
Plan-to-plan transfers are handled between ORS and the investment institution holding your funds (your plan administrator) acting on your request. Your personnel office should not be involved.
ORS will not accept an amount greater than the amount due on the member billing statement(s).
Note: Some institutions require that accounts be liquidated in these situations. If this is the case, advise the company to send one check to ORS for the exact amount of the purchase. You can have the institution send any excess to an investment company of your choice or directly to you; however, you will be responsible for any taxes and penalties. We encourage you to consult with the IRS or your tax advisor for specific tax implications.
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Sending ORS your plan-to-plan transfer certification form only alerts us of your intent. It is your responsibility to see that the funds are sent by your plan administrator. |