State of Michigan Roth 457 Accounts FAQ

Starting in 2026, employees who earn more than $150,000 in FICA wages in the previous year must put catch-up contributions into a Roth account.

These are extra contributions employees age 50 and older can add to their retirement savings.

The Michigan Office of Retirement Services (ORS) will mail your employee a letter. This letter says they reached the standard IRS limit and must switch to Roth contributions. You will see this change on the View DC Feedback File.

The standard limit is $24,500. The catch-up limit is $8,000 or $11,250, depending on age. This equals a total of $32,500 for employees age 50 and older or $35,750 for employees between ages 60 and 63.

No. ORS will automatically switch the employee from pretax to Roth. ORS will switch them back to their original contribution rates after the year ends.

The IRS sets the income level for this group each year. It is based on pay that is subject to Social Security and Medicare taxes (FICA wages). This amount is in Box 3 of a W-2 form.

ORS will only switch an employee to Roth once per year. If the employee manually switches back to pretax, ORS will not change it again. Always follow the rate shown on your View DC Feedback File.

On Sept. 22, 2025, employees gained the option to use a Roth 457 account. Your reporting unit reports this on Detail 4 – DC Contributions (DTL4) records. The new format includes fields for Roth data.

The DTL4 record has four new fields. These are Member DC Roth Contributions, Member DC Roth Percent, Member PHF Roth Contributions, and Member PHF Roth Percent.

Yes. In the Michigan Public Schools Retirement System, these terms mean the same thing. Member DC and Member PHF contributions go into the 457 account. Standard 457 means pretax. Roth 457 means post-tax.

If a member only uses Roth, report the first 2% in the Roth PHF fields. If they use both types, report the first 2% in the standard PHF spots.

Check your View DC Feedback File. The file now has new fields for this data.

Yes. New contribution rate changes appear in your View DC Feedback File the next business day. The Effective Report End Date column shows when the change starts.

Check the messages at the bottom of your reporting webpage. It will tell you if you have new files. You should also check the file once every pay cycle.

Yes.

Yes. If total savings between standard and Roth are under 15%, employees are included in the campaign. If they only use Roth, that rate goes up 1%. If they use both, the standard rate goes up 1%.

Employer funds go into the 401(k) account. Employee funds go into the 457 account. Employees can now choose to put their funds into a Roth 457 instead of a standard (pretax) 457.

Standard 457 funds come out of pay before taxes. Roth 457 funds come out after taxes. Use the View DC Feedback File to collect and report contributions correctly.

You pay income tax on standard 457 money when you take it out later. You do not pay income tax when you take money out of a Roth 457. You also do not pay tax on the growth of Roth money.

No. Employers must put their contributions into the 401(k) account.

Enrollment began on Sept. 22, 2025. Voya Financial sent emails about this on Sept. 30, 2025.

The employee must use their Voya account to change between standard and Roth contributions.

Yes. They must use a Voya form to do this. They will have to pay taxes on the money they move. Employers do not help with this process. Have the employee contact Voya for help.

No. All employee contributions count toward one total IRS limit.

New members start in the standard pretax account automatically. They will get a welcome packet with login steps for Voya. Then they can switch to Roth.

Yes. Employees get matching funds whether they use standard, Roth, or both.