House Bill 4375 FAQs

Reporting

1. If the law goes into effect, will I need to immediately report current retirees with the 9005 or 9025 class codes? 
   If the law goes into effect, begin reporting on the first full pay period with a begin date on or after the date the law goes into effect.
2. How do I report if the law goes into effect during the middle of my pay cycle?
   If the law goes into effect in the middle of your pay cycle, begin reporting on the first full pay period with a begin date on or after the date it goes into effect.
3. Will all retiree positions be reported under the 9005 or 9025 class codes?
   Yes. Report your directly hired retirees under the 9005 class code, and indirectly hired retirees under the 9025 class code.
4. Am I required to report a Detail 4 (DTL4) record for retired employees?
   Continue to submit a DTL4 record for directly hired employees. Retired employees hired indirectly do not require a DTL4 record. 
5. What if my vendor can’t make the technical changes to accommodate the new law immediately?
   Your records may suspend once ORS implements the changes. Manual edits to records may be necessary. It is advantageous for your reporting unit to implement the system changes as soon as possible to prevent future adjustments.
6. Are critical shortage hours still being monitored?
   No. Critical shortage hours are no longer being monitored for retired employees.
7. Do critical shortage hours continue to be reported?
   Yes. Hours are no longer tracked for critical shortage purposes; however, you are still required to report retiree hours or your records will suspend.
8. Have the reporting instructions changed for critical shortage, instructional coaches, school improvement facilitators, school renewal coaches or high impact leadership facilitators, substitute teachers, or National Service members?
   Yes. There are no longer special reporting instructions for retirees returning to work under the critical shortage or as an instructional coach, school improvement facilitator, school renewal coach or high impact leadership facilitator, substitute teacher, or National Service member.

UNIVERSITIES ONLY: How does this impact retirees who have returned to work at a university?
A retiree may work at a university, even if it’s one of the seven universities that participates in the Michigan Public School Employees’ Retirement System, immediately after retirement with no earnings limit and no effect on their pension and insurance premium subsidy. They are not required to have a bona fide termination.

Adjustments

1. Can I still make an adjustment to a Detail 2 (DTL2) record that was reported with a class code other than 9005 and 9025?
   Yes. Records prior to the date the law goes into effect can be adjusted with other retiree class codes, in addition to 9005 and 9025, can still be adjusted. You can find instructions on how to adjust a DTL2 record in section 7.05.08 Adjusting wages or hours on a DTL2 record of the Reporting Instruction Manual (RIM).
2. Will the old versions of the Working after retirement - employer guide be available for adjustments?
   Yes. When the law goes into effect, the old versions of the Working after retirement – employer guide will be in available in the Appendix A: Obsoleted Reporting Information of the RIM.

Contributions

1. Will my reporting unit still be responsible for paying the unfunded actuarial accrued liability (UAAL) employer contribution rate for retired employees?
   No. HB 4375 of 2021 no longer requires employers to pay the UAAL employer contribution rate for retired employees.
2. Why am I still being charged UAAL on Detail 2 (DTL2) records submitted with a 9025 class code?
   Once ORS implements the system changes, you will no longer be charged the UAAL and ORS will work to refund the contributions charged in error.

Impact

1. Will the core services list still exist?
   No. Report your directly hired retirees under the 9005 class code, and indirectly hired retirees under the 9025 class code.
2. Is there a sunset date on HB 4375 of 2021?
   No. HB 4375 does not have a sunset date.

Retiree impact

1. How does the new law affect retired employees?
   A retired employee can return to work at a Michigan public school reporting unit without forfeiting their pension or complying with a limit on earnings if they meet two criteria:
   • They must have completely severed their employment with any Michigan public school employer — known as a bona fide termination — which includes not working during the month of their retirement effective date, and,
   • They must have been retired for nine consecutive months before returning to work.
   As the employer, refer them to the Working After You Retire webpage on the ORS Public School Employees’ Retirement System website where they can research the new law and its impact on their pension.
2. How can I, the reporting unit, determine if the retiree has a bona fide termination?
   Ultimately, it’s the retired employee’s responsibility to ensure that they’ve met the bona fide termination requirements. In addition, it isn’t possible for you, the reporting unit, to know 100% that they’ve met the complete requirements.
   Therefore, as the employer, refer them to the Working After You Retire webpage on the ORS Public School Employees’ Retirement System website as their first point of contact to determine if they’ve met the bona fide termination requirements.
   As the reporting unit you are able to determine the retired employee’s effective date of retirement when you look them up on the Member Benefit link of the Employer Reporting website. This can be used to determine if they met only a portion of the requirements.
3. What if the retired employee returns to work before bona fide termination requirements or the nine consecutive months of retirement?
   If the retired employee returns to work, either directly or indirectly, and they don’t have a bona fide termination and/or they have not been retired nine consecutive months they will temporarily forfeit their pension and insurance premium subsidy.
   As the employer, refer them to the Working After You Retire webpage on the ORS Public School Employees’ Retirement System website where they can research the new law and its impact on their pension.
4. How will critical shortage going away affect the retired employees’ pensions?
   There is no effect to the retired employees’ pensions. HB 4375 of 2021 removed special provisions for retirees returning to work under the critical shortage conditions.
   As the employer, refer them to the Working After You Retire webpage on the ORS Public School Employees’ Retirement System website where they can research the new law and its impact on their pension.
5. Will current retired employees, with less than nine consecutive months of retirement, be grandfathered in?
   Yes. Current retired employees will be grandfathered into the HB 4375 of 2021 rules.
   As the employer, refer them to the Working After You Retire webpage on the ORS Public School Employees’ Retirement System website where they can research the new law and its impact on their pension.

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