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6.05: Withholding employer contributions

6.05: Withholding employer contributions

6.05: Withholding employer contributions

Employers must contribute to the MPSERS pension plan and/or the Defined Contribution (DC) savings plan for each MPSERS member. Employer contributions fall into six categories. The first is an employer contribution required for all MPSERS members regardless of retirement plan. In addition, rates listed below  (categories 2-6) apply to any member who participates in a benefit plan with a DC component.

Contribution rate tables for all retirement plans are available on both the Employer Reporting homepage and the Employer Information website under Administration and Compliance. Employer contribution rates change each state fiscal year (Oct. 1), so ensure that you are using the rates for the current state fiscal year. Universities have different employer contribution rates, so ensure that you are using the rate table for your type of reporting unit.

Category 1: Employer contribution rates for all benefit plans

An employer pension (DB) contribution is assessed on all MPSERS members regardless of benefit plan. The rates are a combination of pension normal costs, pension unfunded actuarial accrued liability (pension UAAL), health normal costs, and health UAAL. For employees in the Defined Contribution (DC) plan or the Basic/MIP Converted to DC plan, employer pension contributions include only pension UAAL and health UAAL.

The employer pension contribution rates are determined annually by an actuary who reviews the health and funding status of the pension trust fund. They are adjusted each state of Michigan fiscal year and are effective from Oct. 1 to Sept. 30. The rate per member varies depending upon the member's benefit plan. The employer amount due is calculated based on the member's reportable wages* and reported to ORS on a DTL2 record.

Online payment for this contribution is made to the DB Contributions and TDP receipt type.

Categories 2-6: Additional employer contribution rates for benefit plans with a DC component

All of the following DC contributions are reported on DTL4 records and are payable online to the DC Contributions receipt type.

  1. The employer contribution for members in the Pension Plus or Pension Plus 2 benefit plan is a 50% match of the member's contribution percent up to a maximum of 1% based on the member's gross wages.
  2. The employer contribution for members who first worked Sept. 4, 2012, or later and elected the DC plan is a 100% match of the member contribution rate up to a maximum of 3% based on the member's gross wages.
  3. Effective Oct. 1, 2017, employers make  a mandatory contribution of 4% of the member's gross wages for members who elect the DC benefit plan.
  4. A mandatory, fixed employer contribution of 4% of the member's gross wages is due for MPSERS members who elected to convert from a Basic or MIP benefit plan to the DC benefit plan.
  5. The employer must match 100% of the employee contribution for any member who elected the  Personal Healthcare Fund (PHF) up to a maximum of 2% of the member's gross wages.

Note: For all members with PHF, the first 2% of DC contributions must go into the PHF and must be matched 100% by the employer. The percentage and dollar amounts are reported on a DTL4 record in the Member and Employer PHF Contributions $ and % fields. Any member contributions over 2% are reported in the Member and Employer DC fields on a DTL4 record and may or may not be matched depending upon the member's benefit plan.

Last updated: 02/01/2018