1.01: The Retirement Act
Through PA 300 of 1980 (the Michigan Public School Employees Retirement Act, or simply the Retirement Act), employees of Michigan public schools receive pension benefits.
The retirement plan is funded by employer contributions, member (employee) contributions, payments made for the purchase of service credit, and the investment earnings on these dollars. The employer contribution rate is determined annually by an actuary firm that reviews the health and funding status of the pension trust fund. Superintendents and other chief administrators are notified of the updated employer contribution rates sometime between Feb. and April of each year, and the rate goes into effect the following Oct. 1, which is the beginning of the state fiscal year. The member contribution rates are set by statute. The Retirement Act also defines membership in the system, reportable compensation (what types of compensation must be reported for defined benefit plans), service credit (how members accrue service to qualify for a retirement benefit), and many other legal requirements signed into law by the governor.