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Summary of Public Act 127 of 2024

Michigan Office of Retirement Services sent this bulletin at 10/08/2024 12:05 PM EDT

On Oct. 3, 2024, House Bill 5803 of 2024 was signed by the governor and became law as Public Act 127 of 2024. There are four changes that are effective for fiscal year (FY) 2025 or FY 2026, as summarized below.

The following change took effect Oct. 1, 2024, though it does not formally become effective until 90 days after the legislature adjourns sine die:

  • The unfunded actuarial accrued liability (UAAL) contribution floor is “reset” for FY 2025 to the actuarially determined contribution. This reduces the MPSERS UAAL stabilization rate from 17.02% to 10.58% for non-universities. Updated rate tables are available on the Employer Reporting website.

The following changes will take effect Oct. 1, 2025:

  • The employer UAAL contribution rate cap will be reduced from 20.96% to 15.21%. The updated rate tables will be available on the Employer Reporting website at that time.
  • Members with the premium subsidy healthcare benefit will no longer be required to contribute 3% toward future healthcare benefits. At that time, employers can expect to see an increase in their other post-employment benefits (OPEB) normal cost contributions for members with the premium subsidy benefit. ORS will communicate more regarding the removal of the 3% member contribution in the coming months.
  • The OPEB normal cost contribution floor will be removed. This means that the OPEB normal cost contribution for FY 2026 and subsequent FY can be less than the previous FY. This change will not impact the pension normal cost contribution floor.

If you have questions regarding this matter, please contact ORS_Web_Reporting@Michigan.gov.

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