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8.02.02: Late payment fees and interest charges

8.02.02: Late payment fees and interest charges

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 seventh 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 including weekends and holidays. (See the list of ORS non-business days.)

Interest is assessed and accrues on outstanding balances that are greater than or equal to $100 from the date the payment was due. Outstanding balances include unpaid employer and employee contributions, tax-deferred payments, fees, and interest.

How ORS calculates late fees and interest:

  • The late fee charged is the greater of either $25 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 Jan. 1, 2021, the interest rate will be 6.00%. 
Year Interest Rate Charged on Shortfall
2022 6.00%
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 Jan. 1, annually.

Last updated: 12/14/2020