8.02.02: Late Payment Fees

Failure to submit payment by the due date will result in late fees and interest charges. The retirement statute, Public Act 300 of 1980, specifically MCL 38.1342(7), provides for the assessment of interest and late fees to be charged to any reporting unit that fails to submit contributions or reports/records by the established due date. 

Payments not received by ORS by the 7th State of Michigan business day after the related pay period end date in which the compensation was paid or deductions were withheld are considered late. If a payment is not received by the due date, a late fee and interest will be assessed against it. Interest charges for late payments accrue from the date the payment is due and are assessed on a daily basis that includes weekends and holidays. 

A list of State of Michigan ORS non-business days is available on the Employer Information website.

If the payment was due on or after January 1, 2015:

  • The late fee charged is the greater of either $25.00 or 0.17% of the shortfall amount. 
  • The rate of interest charged on the late payment is the Actuarial Rate of Return on the prior years’ investments less 2%, but cannot be less than 6%. This rate fluctuates annually at the beginning of the calendar year. 
  • Effective January 1, 2021 the interest rate will be 6%. 
Interest rate charged on shortfall in recent years

Year

Interest Rate Charged on Shortfall

2021

6.00%

2020

9.11%

2019

12.40%

2018

8.48%

2017

7.57%

2016

8.84%

2015

6.00%

*New interest rate takes effect January 1, annually.
 
If the payment was due on or before December 31, 2014:

  • The late fee charged is the greater of either $50.00 or 1% of the shortfall amount.
  • The rate of interest charged on the late payment is the rate earned on the State of Michigan’s common cash fund but cannot be less than 6%. This rate fluctuates quarterly.  

See also section 8.02.05 Interest on Outstanding Balances

Last updated: 12/14/2020