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Glossary

See also this printable list of Acronyms used in ORS Employer Reporting.

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Term

Definition

3% HCC

A term describing the contribution for the premium subsidy contribution (health care contribution or HCC). Also called healthcare contribution in some materials. The preferred term for the contribution is premium subsidy, which is deposited in the Retiree Healthcare Fund.

457 Plan

See State of Michigan 457 Plan.

ACFR

annual comprehensive financial report (formerly known as the comprehensive annual financial report)

ACH

An electronic network for financial transactions in the United States. ACH (Automated Clearing House) processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit, payroll, and vendor payments.

accept

A reporting unit must accept a report to post the records (wages and service) to members’ accounts. A report will show a status of “Posted” when 100% of the records have posted. You may have to accept a report more than one to post 100% of the records in the report.

active member

A person who is on the payroll of a Michigan K-12 public school, intermediate school district, district library, some public school academies, a tax-supported community college, or certain employees who started working before Jan. 1, 1996, for one of seven universities: Central, Eastern, Northern, Western Michigan, Ferris State, Lake Superior State, and Michigan Technological.
Note: Effective Sept. 4, 2012, a person is considered terminated for retirement system purposes (that is, no longer an active member of the system) after two years have passed since the employer reported service credit for the person. See also member, deferred member, and inactive member.

actuarial assumptions

Assumptions that are estimates of future experience with respect to rates of mortality, disability, turnover, retirement, rate or rates of investment income and compensation increases. Actuarial assumptions are generally based on past experience, often modified for projected changes in conditions.

actuarial valuation report

The actuarial valuation report determines, as of the actuarial valuation date, the service cost, total pension liability, and related actuarial present value of projected benefit payments for pensions. MPSERS valuation reports are available on the GASB section of the Employer Reporting website.

actuarial valuation date

The date as of which an actuarial valuation is performed.

Administrator 1-3

Each reporting unit has a person designated as Administrator. For school districts, the superintendent is the Administrator; for other reporting unit types, it is a chief administrator. The person in this role authorizes payroll staff in the roles of Web Administrator or Payroll Processor and signs certain other required certifications and affidavits.

annual comprehensive financial report

A set of U.S. governmental financial statementsthat providesa financial report of a governmental entity (such as a retirement system) that complies with the accounting requirementsset by the Governmental Accounting Standards Board. This report type was formerly known as a comprehensive annual financial report.

bad format record

A record whose status says bad format has an error in its formatting. You must correct/edit the formatting before the record will post. These records may be marked as B-(error message) on the Work On Reports screen or an error download detail.

Basic 4% plan

A variation of the Basic plan in which members elected to contribute 4% of their pay, starting Feb. 1, 2013. Some members who elected the Basic 4% plan opted to contribute 4% until they leave public school employment. Others opted to contribute 4% until they reach 30 years of service (YOS). After accruing 30 YOS, these members become Basic members and do not contribute to the retirement system. See section 6.03.01 Basic plan and Basic 4% plan for details.

Basic DC Converted plan

A variation of the Basic plan in which members switched to the Defined Contribution (DC) plan for all service starting Feb. 1, 2013, and retained any defined benefit (DB) plan service credit accumulated before Feb. 1, 2013. For details see section 6.03.04: Defined Contribution (DC) plan and Basic/MIP Converted to DC plan.

benefit plan

The benefit plan categorizes a member's retirement plan and healthcare plan, which varies based on available benefits, eligibility requirements, contribution rates, and pension factors. Also referred to as benefit structure.

bona fide termination

A bona fide termination is a complete severing of the employee-employer relationship, with no promise of reemployment or a contract for future employment in place before the termination of employment.

business days

Days when ORS is open. Call center staff are available to assist Monday through Friday, except as listed under non-business days and when otherwise notified. Hours: 8 a.m. to 5 p.m. See also non-business days.

charter school

All Michigan charter schools, sometimes known as public school academies (PSAs), are reporting units of MPSERS, even when they have no employees (active or retired) who must be reported. Each year, non-reporting charter schools and public school academies must certify with ORS that they have no employees that must be reported to MPSERS.

comprehensive annual financial report

See annual comprehensive financial report.

contributory plan

A type of retirement plan in which employees make personal contributions from their salaries.
Until 1974 both employees and employers contributed to the pension fund. By 1977 the system was funded entirely through employer contributions — a noncontributory plan. In late 1986, a new contributory plan was introduced, the Member Investment Plan.

core services

The rules regarding core services impact MPSERS retirees who return to work and are hired indirectly. See working after retirement. Positions that are deemed important to the central function of a MPSERS reporting unit. See the Core Services list for detail.

covered payroll

The employers’ covered payroll is defined by GASB Statement No. 82 as payroll on which contributions to a pension plan are based; and by GASB 85 as payroll on which contributions to the OPEB plan are based. For non-university employers, covered payroll represents payroll on which contributions to both plans are based. For university employers, covered payroll for both pension and OPEB is the greater of 1) university payroll on which contributions to the plan are based (member and non-member payroll on which UAAL was required) or 2) the required minimum payroll amount required by PA 136 of 2016 (payroll floor).

Note: the covered-employee payroll must be determined for two different time periods: the pension plan’s fiscal year (October 1–Sept. 30) and the employer’s fiscal year (July 1 – June 30).

critical shortage position

A position on the list of critical shortage disciplines establishedby the Michigan Department of Education each school fiscal year.The rulesregarding critical shortage positionsimpact MPSERS retirees who return to work. The critical shortage position list from the Michigan Department of Education is published on the ORS website each fiscal year.

DB

Defined benefit. DB may refer to a Basic or MIP plan; or to the pension component of Pension Plus or Pension Plus 2.

DB pension contributions

All members except those in the Defined Contribution plan have defined benefit (DB) pension contributions on account, including members with the Basic DC Converted or MIP DC Converted plan (DB pension contributions were made until their conversion date when their contributions switch to DC). Members in Pension Plus or Pension Plus 2 have both DB contributions and DC contributions on account.

DC

Defined contribution. Several benefit plans have a defined contribution component: the Defined Contribution plan, Pension Plus, Pension Plus 2, and the PHF benefit. All defined contributions are made to the participants’ State of Michigan 401(k) and 457 Plans.

deferred compensation

Compensation that is deferred (whether by salary reduction or by nonelective employer contribution), generally under a tax-deferred arrangement established by an employer.
Beginning May 2022, all Basic and MIP members with the Premium Subsidy benefit may choose to defer a percentage of their compensation to the State of Michigan 457 Plan. No employer contributions are permitted.

deferred inflows and outflows

The deferred inflows and outflows of pension and OPEB resources are amounts used in developing the annual pension expense and OPEB expense. Deferred inflows and outflows arise with differences between expected and actual experiences; changes of assumptions; and differences between projected and actual returns on investments. In the GASB Sample Notes, the portion of these amounts not included in pension expense or OPEB expense should be included in the deferred inflows and outflows of resources to be recognized in future years.

deferred member

A person who stopped working after becoming vested but before reaching the age requirement to draw a pension.

defined benefit (DB) plan

Any retirement plan that provides a guaranteed lifetime pension payment in retirement based on a set formula. To qualify for a pension at retirement, members must meet certain age and service requirements.

Defined Contribution plan (DC plan)

A retirement plan in which an employee and/or their employer may contribute to the employee's individual savings account within the State of Michigan 401(k) and 457 Plans for the benefit of the employee and their beneficiary(ies). Employees choose how to invest their balances among the various options provided in the plan. The IRS sets restrictions to when and how the employee can withdraw these assets without penalties. See 6: Member Benefit Plans and Contributions

Detail 1 (DTL1) record

A DTL1 record provides ORS with demographic information about each MPSERS employee. A reporting unit submits a DTL1 record when adding a new employee or to report a change in name or address for an existing employee.

Detail 2 (DTL2) record

A DTL2 record provides data that includes employee Social Security number, name, member contributions, employer contributions, employment class code, hours, pay rate (contract or hourly), pay frequency, record begin and end dates, and the contract begin and end dates. It is required when a reporting unit has wages, hours, or contributions to report or change.

Detail 3 (DTL3) record

A DTL3 record reports tax-deferred payments for the purchase of service credit.

Detail 4 (DTL4) record

A DTL4 record is used to report defined contributions (including Personal Healthcare Fund contributions) or deferred compensation, and to update employee status (including termination) to Voya Financial, the third party administrator.

disability retirement

If an active public school employee becomes totally and permanently disabled, he or she may qualify for a disability retirement benefit. Eligibility and pension amount depend on whether it's a duty disability or nonduty disability.

discount rate

For purposes related to GASB 68 and 75, the discount rate is the single rate of return that results in the present value of all projected benefit payments to be equal to the sum of the funded and unfunded projected benefit payments, specifically:
1. The benefit payments to be made while the plan’s fiduciary net position is projected to be greater than the benefit payments that are projected to be made in the period and;
2. The present value of the benefit payments not in (1) above, discounted using the municipal bond rate.

duty disability

A member may qualify for a duty disability benefit if, due to an injury or illness incurred at work while an active state or public school employee,the member becomes totally and permanently disabled.

EAA

A statewide school district for the lowest performing schools in Michigan established under an interlocal agreement between the Board of Regents of Eastern Michigan University and the City of Detroit School District. The new district was designed to take the schools in the bottom 5% statewide and transform them into viable, financially responsible schools. It was considered a reporting unit, with its own retirement system, reporting Defined Contribution plan contributions semimonthly. The EAA was dissolved on June 30, 2017.

earned service credit

All service credited through employment, limited to capping rules. See service credit.

earnings limitation

Regular retirees of participating public school employers (MPSERS) may be subject to employment restrictions or limits on how much they can earn annually. See working after retirement. For those receiving a disability retirement, special limitations apply if the retiree goes to work, whether for a Michigan public school or another employer. Disability retirees under age 60 considering a return to work should contact ORS first.

employer contributions

Employers make contributions as required by the retirement act, depending on the employee's benefit plan. Employer contributions go into the pension system, the retiree healthcare system, or the employee's defined contribution account (the State of Michigan 401(k) and 457 Plans).
The total percentage of reportable compensation charged to all Michigan Public School Employees' Retirement System (MPSERS) reporting units, which is the sum of: pension normal cost, pension unfunded actuarial accrued liability (UAAL), health normal cost, health UAAL, UAAL rate stabilization (since fiscal year 2014-15).
MPSERS employer contribution rates are calculated annually each fiscal year. The rates are published on the Employer Information website under Administration and Compliance, Contribution Rates.

Employer Information website

A website with information for MPSERS employers about retirement reporting. Also known internally as PSRU (because the web address is Michigan.gov/PSRU), the website contains the Reporting Instruction Manual (RIM), links to Employer Reporting forms, training, and other useful information. This site is different from the Employer Reporting website.

employer number

See reporting unit number. Also known as an organization number.

Employer Reporting 1-5

Web users in this role have access to all report processing functions but have no access to online payment processing. Each RU can have up to five users in this role.

Employer Reporting website

The website that MPSERS employers use to report wages, hours, and contributions; to pay contributions; to complete employees' final payroll details (FPDs); and to see information about their employees' plans. Also known as ESS (Employer Self-Serve). Access requires users to log in using MILogin.
See also Employer Information website, a separate site that provides guidance on reporting.

employment class code

A number that identifies the type of job an employee is being paid for. A complete list of employment class codes is found in section 13.02.01: Detail 2 records - employment class codes and definitions. Also known as a job class code or just a class code.

FAC

See final average compensation.

FICA

Employees and employers pay a Federal Insurance Contributions Act (FICA) tax to fund Social Security and Medicare.

fiduciary net position

The value of the assets of the pension trust. With regard to pension plans, this term is only meaningful at the system (plan) level, not at the employer level.

file status

A retirement report file that a MPSERS employer has submitted to the ORS reporting system may be in one of threefile statuses:

  • In progress means thatthe report file was loadedthat day and it has not run through the overnight batch process.
  • Loaded means thatthe report file ran through the overnight batch process and has loaded successfully.
  • Not loaded means thatthe report file did not load properly.

The file status is not the same as the report status.

File Transfer Service (FTS)

A web-based file transfer protocol provided by the state of Michigan to enable the fast and secure transfer of data files between agencies within the state of Michigan and its external partners. MPSERS employers and ORS Employer Reporting staff use the FTS for data files with personally identifiable information.

final average compensation (FAC)

The average of the highest consecutive years' earnings, a figure used in the pension formula. The number of years varies by benefit plan. The highest-earning years used to calculate the benefit may have occurred earlier in a member's career; ORS still refers to it as the final average compensation (FAC).
For Member Investment Plan (MIP) members, the highest three consecutive years' earnings (36 months) are averaged to determine the FAC. For Basic plan, Pension Plus, and Pension Plus 2 members, the highest five consecutive years' earnings (60 months) are used. If a member elected to switch to the Defined Contribution (DC) plan effective Feb. 1, 2013, the pension calculation includes compensation earned while in a defined benefit (DB) plan.
See pension formula.

final payroll details (FPD)

After a member submits all required paperwork for the retirement application, the employer(s) must submit final wage and service information through the Employer Reporting website (ESS). The reporting unit's payroll officer must report and verify the wages and any additional payments the member may have received so ORS can determine final eligibility and the wages to be used to calculate the pension. Final payroll details are categorized as either Regular Retirement or Initial Pension.

fiscal year

The state of Michigan fiscal year begins Oct. 1 and ends Sept. 30.

The school fiscal year begins July 1 and ends June 30.

Some aspects of reporting are tied to the school fiscal year (July 1 to June 30). Other aspects, such as GASB 68 compliance, use the state fiscal year, which begins Oct. 1 and ends Sept. 30.

flagged record

A record that needs review but will still post if not corrected. A flagged record may be marked as F- (error message) on the Work On Reports screen or an error download detail.

FPD

See final payroll details.

frequency of pay

A field on the DTL2 record. For both hourly and salaried employees, report the total number of pays that the employee would be paid as if he or she is working the entire year (i.e., 21 or 26).

FY, FYE

fiscal year, fiscal year ending

GASB 67 and GASB 68

GASB Statement No. 67 revises requirements for the annual comprehensive financial reports at the system level (for example, ORS), while GASB 68 revises those requirements at the level of participating employers. It also enhances accountability and transparency through revised and new note disclosures and required supplementary information. GASB 68 is in effect for fiscal years beginning after June 15, 2014 (that is, for years ended June 30, 2015, or later). Each year ORS provides data to employers regarding the system's annual pension expense, net pension liability, and each employer's proportionate share of that liability.

GASB 74 and GASB 75

GASB Statement No. 74 revises requirements for the annual comprehensive financial reports at the system level (for example, ORS), while GASB 75 revises those requirements at the level of participating employers. It also enhances accountability and transparency through revised and new note disclosures and required supplementary information. GASB 75 is in effect for fiscal years beginning after June 15, 2017 (that is, for fiscal years ended June 30, 2018, or later). Each year ORS provides data to employers regarding the system's annual OPEB expense, net OPEB liability, and each employer's proportionate share of that liability.

graded premium subsidy

A graded premium subsidy is based on career length. The longer a member works under the retirement system, the greater the insurance premium subsidy is, up to the maximum subsidy allowed by law (currently set at 80%).

inactive member

A person who stopped working or was terminated for retirement system purposes before becoming vested. If an inactive member is rehired by an employer, the person's status returns to active member. See termination date.

ISD

intermediate school district

load

Submit a report in the Employer Reporting website, either by uploading a file, copying forward the previous report, or creating a new report. The night after a reporting unit loads a report, the ORS system runs a basic data and validations check on it and send a report status email, showing how many records are ready to post or are suspended, flagged, or in a bad format.

LTD

Long-term disability. Long-term disability is a type of insurance coverage that provides wage replacement to employees. LTD is not reportable on either a DTL2 or DTL4 record. See section 4.03: Nonreportable compensation.

long-term expected rate of return

The long-term rate of return is the expected return to be earned over the entire trust portfolio based on the asset allocation of the portfolio.

market value of assets

The cash value of the pension assets at a given time; the price at which a willing buyer and willing seller agree to exchange an asset at a particular time.

measurement date

The measurement date is the end date of the plan fiscal year. For MPSERS employers, it is Sept. 30 of the year before it must be included in financial statements. For example, in a school fiscal year ending June 30, 2018, the measurement date is Sept. 30, 2017.

member

Retirement law defines a MPSERS member as a public school employee who is not specifically excluded from membership. Any employee who does not fall in an excluded category is automatically considered a member of this retirement system. This includes, but is not limited to, temporary and intermittent employees, such as substitute teachers, crossing guards, temporary clerical help, and any other temporary help.See also active member, inactive member,deferred member.

member billing statement

A statement that details the type of service credita member can purchase, how much the member can buy, the cost, and the due date. Although it's called a billing statement,the member is under no obligation to buy any of the credit. The due date is when the terms of the statement expire.

member contributions

The contributions the employer withholds on behalf of the member to invest in their pension, retiree healthcare, or defined contribution account.

Member Inquiry 1-3

A person in this reporting role has access to employees’ benefit plan (retirement and healthcare) but has no access to other reporting functions or to online payment processing. Each RU can have up to three users in the Member Inquiry role.

Member Investment Plan (MIP)

A MPSERS tax-deferred, contributory retirement plan. This defined benefit plan was introduced in late 1986 to replace the Basic plan. Members at that time could choose between the two plans.The Member Investment Plan (MIP) provides more generous pension benefit options than the Basic plan but requires member contributions.Members who first worked in 1990, but before July 1, 2010, are MIP members. This plan consists of the MIP Fixed, MIP Graded, MIP Plus, MIP 7%, and MIP DC Converted benefit plans. All MIP benefit plans have the same pension qualification rules, but they differ in contribution rates and pension formula. Often abbreviated as MIP.

miAccount

ORS' secure, online tool for managing retirement accounts. New members make their retirement plan election on miAccount. Employees, retirees, and past employees of Michigan public schools can log in to miAccount to check balances and status, name beneficiaries, and perform other retirement-related tasks.

Michigan Public School Employees' Retirement System

Michigan Public School Employees' Retirement System (MPSERS) is provided under Public Act 300 of 1980, as amended.

MILogin

The state of Michigan single sign-on standard, which uses multi-factor authentication (MFA) for stronger security. Beginning in November 2021, payroll staff use a MILogin for Third Party account to log in to the Employer Reporting website, and members use a MILogin account to log in to miAccount.

MIP

See Member Investment Plan.

MIP 7% plan

A variation of the Member Investment Plan (MIP) in which members elected to increase their employee contributions to 7% and maintain the 1.5% pension factor in their pension calculation. Some members who elected the MIP 7% plan opted to contribute 7% until they leave public school employment. Others opted to contribute 7% until they reach 30 years of service (YOS) (Option 2). After attaining 30 years of service, these members return to their previous benefit plan and contribution rate. For details see section 6.03.02: MIP Fixed, MIP Graded, MIP Plus, and MIP 7% plans.

MIP DC Converted plan

A variation of the Member Investment Plan (MIP) in which members switched to the Defined Contribution (DC) plan for all service starting Feb. 1, 2013, and retained any defined benefit (DB) plan service credit accumulated before Feb. 1, 2013. As DC plan participants, they receive a 4% employer contribution to a tax-deferred 401(k) plan account. Wages and service credit earned during the DC period are not used in the calculation of the member's DB final average compensation. The DC service credit earned may only be added to the DB service credit to qualify a member for a DB pension. For details see section 6.03.04: Defined Contribution (DC) plan and Basic/MIP Converted to DC plan

MIP Fixed plan

A variation of the Member Investment Plan (MIP) for members who elected the MIP before Jan. 1, 1990, or were Basic plan members who enrolled in the MIP by Jan. 1, 1993. MIP Fixed members contribute 3.9% of their pretax salary to the pension fund. For details see section 6.03.02: MIP Fixed, MIP Graded, MIP Plus, and MIP 7% plans.

MIP Graded plan

A variation of the Member Investment Plan (MIP) for members who first worked between Jan. 1, 1990, and June 30, 2008, or returned to public school employment between Jan. 1, 1990, and June 30, 2008, and did not work during the first MIP window (Jan. 1, 1987, and Dec. 31, 1989). MIP Graded members contribute a graded amount, up to 4.3% of their pretax salary, to the pension fund. For details see section 6.03.02: MIP Fixed, MIP Graded, MIP Plus, and MIP 7% plans.

MIP Plus plan

A variation of the Member Investment Plan (MIP) for members who first worked between July 1, 2008, and June 30, 2010. MIP Plus members contribute a graded amount, up to 6.4% of their pretax salary, to the pension fund. For details see section 6.03.02: MIP Fixed, MIP Graded, MIP Plus, and MIP 7% plans.

MIP window

An election period during which eligible Basic members could make choices about their retirement plan during retirement system reform. There were MIP window periods in 1991 and in 1999. See section 6.03.01 Basic plan and Basic 4% plan.

MPSERS

See Michigan Public School Employees' Retirement System.

MPSERS election window

A MPSERS election window was in effect from Sept. 4, 2012, to Jan. 9, 2013. Changes went into effect the first day of the pay period that began on or after Feb. 1, 2013. See section 6.01: History of the retirement benefit plans.

multiple employer cost-sharing defined benefit pension plan (cost-sharing pension plan)

A multiple employer defined benefit pension plan in which the pension obligations to the employees of more than one employer are pooled and pension plan assets can be used to pay the benefits of the employees of any employer that provides pensions through the pension plan. MPSERS is a cost-sharing multiple employer pension plan.

net OPEB liability (NOL)

The net OPEB liability is the liability of employers (reporting units) to members for the premium subsidy benefit. The net OPEB liability equals the total OPEB liability minus the market value of assets.

net pension liability (NPL)

The net pension liability is the liability of employers (reporting units) to plan members for benefits provided through a defined benefit pension plan. The net pension liability equals the total pension liability minus the market value of assets.

non-business days

Except as otherwise notified, non-business days are weekends (Saturday and Sunday); state of Michigan holidays; and Columbus Day. (ORS is open on Columbus Day; however, the Federal Reserve is closed. Employers cannot useColumbus Day as an online payment date.) See business days.

noncontributory plan

A type of retirement plan where the retirement system is funded entirely through employer contributions. Since 1977, the Basic plan has been a noncontributory plan.

nonduty disability

A member may qualify for a disability retirement benefit if he or she becomes totally and permanently disabled from an illness or injury incurred outside of workwhile an active public school employee.A member'snonduty disability protection begins whenthey are vested with the equivalent of 10 full-time years ofMichigan public school employment.

nonreportable compensation

Some types of payments made to school employees are not recognized as compensation for pension purposes and should not be reported on the Detail 2 (DTL2) record. These types of payments are excluded by the retirement act. Apart from long-term disability and weekly workers' compensation, however, nonreportable compensation is considered as part of gross wages and should be reported on a DTL4 record. See section 4.03: Nonreportable compensation.

normal cost

A portion of the contribution rate, determined each year by the retirement system's actuary and charged as a percentage due on payroll. Normal cost is made up of pension normal cost — the cost of pensions for active employees earning another year of service credit in the retirement system — and health normal cost — the cost of retirement healthcare benefits for active employees earning another year of service credit in the retirement system.

OPEB

See other postemployment benefits.

Optional Retirement Plan (ORP)

A retirement plan that is available to certain employees of universities and community colleges. Employees who elect to participate in ORP are not members of MPSERS. However, retirees who return to work at a MPSERS university may need to be reported, even if they elect to participate in an ORP when they return to work.

ORG

An employer or reporting unit is sometimes referred to as an organization or ORG (for example, in ORG number).

organization number

See reporting unit number. Also known as an employer number.

ORP

See Optional Retirement Plan.

other postemployment benefits (OPEB)

postemployment benefits other than retirement income that are provided separately from a pension plan, as well as postemployment healthcare benefits regardless of the manner in which they are provided. Other postemployment benefits do not include termination benefits.

Public Act (PA)

A public act is a bill that has been approved by the Michigan Legislature and signed into law by the Governor, filed with the Secretary of State, and assigned a Public Act number.

PA 219 of 2015

See Public Act 219 of 2015.

PA 300 of 1980

See Public Act 300 of 1980.

PA 300 of 2012

See Public Act 300 of 2012.

PA 464 of 2012

See Public Act 464 of 2012.

PA 75 of 2010

See Public Act 75 of 2010.

pay rate

Employers are required to report a pay rate for each reportable employee in each pay period based on the employee's classification.
For hourly employees, employers report the hourly rate based on the pay schedule.
For contract/salaried employees, employers report a pay rate representing the full amount of compensation allowed by the contract that is recognized as compensation by law and would be earned in the entire school year, even if the employee works only part of the year.

Payment Processor 1-3

Payment Processors have access to online payment processing and to the online Employer DB Statement. They have no access to reporting functions.
Unlike other reporting unit account types, ORS must create and activate the account for a new Payment Processor. Because of the sensitive nature of the information to be viewed, ORS requires that the reporting unit's Administrator 1 (superintendent or chief administrator, not the Web Administrator) authorizes this request using the Payment Processor Authorization (R0842C) form.

payroll calendar

An employer's payroll calendar represents its regular pay schedule and is made up of the organization's fiscal year pay period dates. Once each year ORS requests the pay period beginning and ending dates for the next fiscal year from each MPSERS employer. The beginning and end dates on retirement detail reports for each pay period must match the employer's payroll calendar.

pension factor

A multiplying factor in the pension formula. The pension factor is 1.5% or 1.25% depending on the member’s election during the 2012 reform. See 6: Member Benefit Plans and Contributions for details.

pension formula

The annual pension benefit is based on a formula that multiplies final average compensation by a pension factor times years of credited service.

Pension Plus plan

A retirement plan for members who first worked for a Michigan public school between July 1, 2010, and Sept. 3, 2012, or first worked for a Michigan public school between Sept. 4, 2012, and Jan. 31, 2018, and did not choose the Defined Contribution retirement plan. Pension Plus is a hybrid retirement plan that gives members a pension component and a savings component.

Pension Plus 2 plan

A retirement plan for members who first worked for a Michigan public school on or after Feb. 1, 2018 and elected the Pension Plus 2 plan. Pension Plus 2 is a hybrid retirement plan that gives members a pension component and a savings component.

Personal Healthcare Fund (PHF)

A portable, tax-deferred fund that can be used to pay for healthcare expenses in retirement. Members have the Personal Healthcare Fund (PHF) if they chose that retiree healthcare benefit under Public Act (PA) 300 of 2012, or they first worked for the retirement system on or after Sept. 4, 2012. The PHF automatically enrolls participants in a 2% employee contribution into their 457 account, earning them a 2% employer match into a 401(k) account. PHF contributions made by the employer and the employee are invested in the State of Michigan 401(k) and 457 Plans. See section 6.02: History of the retiree healthcare plans.

The PHF benefit does not meet the definition of a defined contribution OPEB plan as described in GASB 75. No note disclosures or other action is needed for the PHF benefit when implementing GASB 75.

plan-to-plan transfer

Members can use funds from a qualified retirement plan such as a 401(k) or 457 to purchase service credit. See qualified plan rollover.

post

Add wage and service information to a member’s account. Both records and reports move from unposted to posted status. A record posts when it passes the overnight basic data and validations check and the reporting unit has accepted the report. A report is considered posted when 100% of its records are posted. Before a record posts, it can be edited; after it posts, any corrections must be made using an adjustment record.

Premium Subsidy

For members who have the Premium Subsidy retiree healthcare benefit and meet eligibility requirements, the retirement system will pay a portion of the monthly insurance premiums when the member retires. Members with the Premium Subsidy benefit contribute 3% of compensation to the Retiree Healthcare Fund to retain eligibility for the retiree health insurance premium subsidy offered by the state upon retirement. This benefit fits the description of a postemployment benefit (OPEB) and is thus governed by reporting requirements described in GASB Statement No. 75.

PSA

Public school academy. See charter school.

Public Act 219 of 2015

Public Act 219 of 2015 changed some rules for public school retirees who return to work at a Michigan public school reporting unit after beginning their pension. It was in effect from Dec. 16, 2015, until July 1, 2018. See critical shortage position.

Public Act 300 of 1980

Public Act 300 of 1980, as amended, is the law that provides the retirement plan for Michigan public school employees. Also known as the Michigan Public School Employees Retirement Act. As amended means the current version of the law, with all amendments since its first passage, including the reforms of 2010 and 2012 and other public acts that have amended it.

Public Act 300 of 2012

The public act that granted all eligible active members of MPSERS a voluntary election regarding their retirement healthcare. Active members who were active before July 1, 2010, also had a voluntary election regarding their pension. Note: PA 300 is also the number of the original MPSERS Retirement Act — PA 300 of 1980 — and when PA 300 appears without a year, generally it refers to PA 300 of 1980.

Public Act 464 of 2012

Public Act 464 of 2012 changed reporting requirements regarding retirees of the Michigan Public School Employees’ Retirement System who return to work for a reporting unit, either directly or indirectly. The changes went into effect Dec. 27, 2012, and most of the provisions were no longer in effect as of July 1, 2014. See critical shortage position. See also Public Act 219 of 2015.

Public Act 75 of 2010

The act that required MPSERS members to contribute 3% of their earnings toward a trust in order to prefund retiree healthcare benefits, beginning in July 2010. Also known internally as the 2010 Reform Act. It was modified substantially by Public Act 300 of 2012.

qualified participant

An employee eligible to participate in the Defined Contribution (DC) plan, hybrid plan (i.e., Pension Plus or Pension Plus 2), and/or the Personal Healthcare Fund (PHF). There is no distinction between pre- and post-retirement qualified participants in terms of defined contributions. Qualified participants can be either working or not working. Basic or MIP members with the Premium Subsidy benefit who defer compensation to the State of Michigan 457 Plan are considered participants but not qualified participants. Employers pay contributions and UAAL on all qualified participants per Public Act (PA) 75 of 2010 and PA 300 of 2012.

qualified plan rollover

The process of transferring money from one qualified (as defined by the IRS) retirement plan to another without a requirement to pay taxes or penalties on the money when it is transferred. Qualified plans are generally a 401(a), 401(k), 403(b), Individual Retirement Account (IRA), and some 457 plans. See plan-to-plan transfer.

rate stabilization

Each year, state funds are appropriated for MPSERS unfunded liabilities obligations in excess of the statutory cap of 20.96% for non-university reporting units (per Public Act 300 of 2012) and the statutory cap of 25.73% for university reporting units (per Public Act 136 of 2016). From November to August, MPSERS employers who pay UAAL contributions receive monthly payments from the state of Michigan, representing the amount of UAAL contributions above the rate cap. These payments represent a funding source to help reporting units pay their retirement obligations. ORS then invoices each recipient reporting unit each month (November to August), and reporting units are expected to submit funds in the same amount back to ORS by the due date shown on the invoice.

record

A record, or detail record, is submitted in a retirement detail report and provides data to ORS regarding an employee. See: Detail 1 (DTL1) record, Detail 2 (DTL2) record, Detail 3 (DTL3) record, and Detail 4 (DTL4) record.

report status

A report status email is generated every time a report goes through the overnight validations and edits process. Submitting a report, editing, or opening and saving any DTL record, or accepting a report will all cause the report to run through the validations and edits process again. The report status email shows the report begin and end dates and shows how many records are posted, suspended, flagged, or in a bad format.

reportable compensation

Compensation is defined by retirement law, Public Act (PA) 300 of 1980 as amended, in section 3a (MCL 38.1303a). All compensation defined in PA 300 of 1980 is considered reportable for pension purposes. See also nonreportable compensation. (Note that reporting units must also report some types of nonreportable compensation on Detail 4 records, for the purposes of DC contributions and Personal Healthcare Fund contributions.)

Reporting Instruction Manual

Also referred to as the RIM, the manual is a summary of plan provisions under Public Act 300 of 1980, as amended, with instructions on how to report wages, hours, and contributions for members and some retirees to ORS. Current laws, rates, and factors are subject to change. If there are discrepancies between the manual and the actual law, the provisions of the law govern. Anyone can view the RIM on its website, which is maintained by ORS.

reporting unit

An employer that participates in the Michigan Public School Employees' Retirement System. Participating schools and organizations are known as reporting units and are one of the following types:

· K-12 school districts.

· Intermediate school districts (ISDs) and regional educational service agencies (RESAs).

· Charter schools and public school academies (PSAs).

· District libraries.

· Tax-supported community colleges.

One of the seven participating universities (Central Michigan University, Eastern Michigan University, Ferris State University, Lake Superior State University, Michigan Technological University, Northern Michigan University, and Western Michigan University).

reporting unit number

The five-digit number assigned by ORS to each reporting unit. Employers use this number to log in to the online reporting system and to identify their reporting unit on forms and other communications. Also known as an employer number or an organization number in Clarety.
For reporting units that were originally assigned a four-digit number (9999), add a zero to the end to create the five-digit number (99990). See ORG number.

retiree

Anyone receiving a disability or retirement pension from the retirement system.

retiree earnings

Retiree earnings include items reported on a retiree's W-2 form as earnings for services performed for an employer, including, but not limited to, any amounts deferred or contributed to an annuity. See reportable compensation. See also working after retirement.

Retiree Healthcare Fund

Members with the premium subsidy benefit contribute 3% of compensation to the Retiree Healthcare Fund to retain eligibility for the retiree health insurance premium subsidy offered by the state upon retirement.

retirement detail report

MPSERS reporting units must submit retirement detail reports (or simply reports) to ORS for each pay period. These reports are made up of records containing wage and contribution data for each employee who is a member of the retirement system. The data also includes demographic, tax-deferred payment plan information, and DC contributions and percentages.

retirement effective date

A member's retirement effective date is the first day of the month following the month in which the member has satisfied all eligibility requirements, terminated employment, and submitted their application.

routing number

The nine-digit number associated with a financial institution. This number appears on the Payment Details screen after a payment is made.

RU, RU#

See reporting unit, reporting unit number. See ORG number.

SC

See service credit.

service credit

A member's service credit (SC) reflects all service (hours worked) applicable to the member's pension, including earned, granted, transferred, reinstated, and purchased service credit. See years of service and earned service credit. Reporting units must report all hours of service an employee has worked (earned service credit). A minimum of 1,020 hours worked during the school fiscal year (subject to caps as defined by statute) equals 1 year of service credit. A member's pension eligibility and pension amount are based in part on service credit, including all forms of service credit.

service cost

The portion of the actuarial present value of projected benefit payments that is attributed to a valuation year.For most purposes the service cost is very similar to the normal cost (the actuarial present value of the pension trust benefits allocated to the current year by the actuarial cost method).

Social Security number (SSN)

The number assigned to each employee as part of the federal program established in 1935. Social Security numbers are classified as restricted data.

State of Michigan 457 Plan

Beginning May 2022, all members with a Basic or MIP plan and the premium subsidy benefit may choose to defer compensation into their State of Michigan 457 Plan. No mandatory or matching employer contributions are permitted. Sometimes shortened to 457 Plan.

State of Michigan 401(k) and 457 Plans

For employees with the Defined Contribution plan or a DC component, both employees and employers make contributions into the State of Michigan 401(k) and 457 Plans, which are managed by Voya Financial. Employee contributions go to the employee’s 457 Plan account and employer contributions go to the employee’s 401(k) Plan account.

STD

Short-term disability. See section 4.02: Reportable compensation.

Supplemental Tax-Deferred Payment (TDP) Agreement

A form (R0654C) that allows an employee with a Tax-Deferred Payment (TDP) Agreement to permanently increase the per-pay-period deduction.

suspend

A retirement detail report, or an individual record on that report, will suspend if the report or record contains inaccurate data or errors. Each retirement detail report is run through an overnight batch process of edits and validations. Any time one of the edits or validations fails, the reporting unit receives notification of a suspended report and/or record.

tax-deferred

Tax-deferred refers to delaying, or deferring, the payment of taxes on wages put in a qualified retirement plan or used to purchase service credit.

tax-deferred payment

A program that allows members to purchase service credit with tax-deferred payments (TDP) deducted from their wages. The amount the member authorizes for deduction from the paycheck is not subject to income tax until he or she begins taking distributions, usually at retirement.

Tax-Deferred Payment (TDP) Agreement

A form (R0392C) that establishes a contract between the employee and the reporting unit authorizing the reporting unit to withhold pretax dollars and submit payment to ORS for the purchase of service credit and/or the payment of unremitted Member Investment Plan contributions.

Tax-Deferred Payment (TDP) Agreement Addendum

A form (R0625C) that transfers a Tax-Deferred Payment (TDP) Agreement from a previous employer to a new employer, so that the new employer can continue the withholding of TDP payments.

TDP

See tax-deferred payment.

terminate

Separate from employment, end the employer-employee relationship. See termination date and bona fide termination.

termination date

In most cases an employee's termination date is the date the employee and the employer ended their relationship. However, effective Sept. 4, 2012, a public school employee on an approved leave of absence is considered terminated for retirement system purposes on the date two years after the employer last reported service credit for the person. Employers report termination dates on DTL4 records.

total OPEB expense

The sum of the following items that are recognized from the beginning to the end of the MPSERS fiscal year (Sept. 30).

  • Total service cost.
  • Interest on the total OPEB liability.
  • Current-period benefit changes.
  • Employee contributions.
  • Projected earnings on plan investments.
  • OPEB plan administrative expense.
  • Other changes in plan fiduciary net position.
  • Recognition of outflow (inflow) of resources due to liabilities.

Recognition of outflow (inflow) of resources due to assets.

total OPEB liability (TOL)

The portion of the actuarial present value of projected benefit payments that is attributed to past periods of member service.

total pension expense

The total pension expense is the sum of the following pension expense items that are recognized from the beginning to the end of the MPSERS fiscal year (Sept. 30). Some of the items will be additive and some will be subtractive, depending on each fiscal year.

  • Total service cost.
  • Interest on total pension liability.
  • Current-period benefit changes to plan.
  • Employee (or member) (service cost) contributions.
  • Projected earnings on plan investments.
  • Administrative expense.
  • Other changes in plan fiduciary net position.
  • Recognition of beginning deferred outflows (inflows) due to liabilities.
  • Recognition of beginning deferred outflows (inflows) due to assets.

total pension liability (TPL)

The portion of the actuarial present value of projected benefit payments that is attributed to past periods of member service.

transition date

Any changes to a member's benefit plan under Public Act 300 of 2012 was effective as of the member's transition date. For most members, the transition date was the first day of the pay period that began on or after Feb. 1, 2013. The actual date the changes took effect depends on theemployer's payroll cycle.

UAAL or UAL

See unfunded actuarial accrued liability. UAAL and UAL are the same. UAAL is the preferred term, but some older documents and the Employer Reporting website still use UAL.

unfunded actuarial accrued liability

The difference between the actuarial accrued liability and valuation assets. Pension UAAL and health UAAL are calculated separately. Employer contribution rate tables showpercentages thatare due to ORS to cover pension UAAL and health UAAL.
Note: The combined pension and healthcare UAALis capped at20.96% of payroll for all non-university reporting units (per Public Act 300 of 2012) and at25.73% of payroll forthe sevenuniversity reporting units that participate in MPSERS (per Public Act 136 of 2016). See rate stabilization.

vest, vested

The right to receive a benefit at some point in the future. Members are vested whentheyhave sufficient years of service to qualify for a future benefit (such as pension, retirement account balance, insurance offerings that are based on employer contributions) even iftheyterminate employment.

Voya Financial

The entity awarded the third-party administration contract for the State of Michigan's 401(k) and 457 Plans.

wage code

A code used on Detail 2 records to differentiate between types of reportable wages, such as regular wages vs. adjustments, retiree, summer spread, coaches wages or wages without hours. A complete list of wage codes is in section 13.02.02: Detail 2 records - wage codes.

Web Administrator

Each MPSERS reporting unit designates one person to be its Web Administrator. The Web Administrator can authorize, activate, inactivate and update web user accounts. Some Web Administrators are responsible for more than one reporting unit. At some reporting units, the Web Administrator also performs the functions of the Employer Reporting role.

web user

Any payroll staff at a reporting unit that has access to the Employer Reporting website. Reporting units may have more than one web user, and each type of web user has different levels of access to the Employer Reporting website. Types of web user accounts include:

  • Web Administrator.
  • Employer Reporting.
  • Payment Processor.

Member Inquiry.

weekly workers' compensation (WWC)

See workers' compensation.

workers' compensation

The system used to provide wage replacement, medical, and rehabilitation benefits to workers who suffer a work-related injury. In Michigan the system is administered by the Workers' Compensation Agency, part of Michigan's Department of Licensing and Regulatory Affairs. Employers, either directly or through their insurance companies, provide this compensation.
Weekly workers' compensation is the benefit paid to eligible workers, reported by the employer, and administered by the Workers' Compensation Agency. Worker's compensation is reportable compensation to ORS on a DTL2 record but not on an DTL4 record.

working after retirement

  • The term refers to rules (primarily earnings limits) placed on some retirees who return to work while drawing a pension. The impact of working after retirement rules on a retiree depends on several factors, including the retirement effective date; the type of position the retiree will hold; the type of employer (K-12 or college/university); and whether the retiree was hired directly or indirectly (by a third party or as an independent contractor).
    Legislation that modified working after retirement includes Public Act (PA) 464 of 2012 (most provisions of this act are no longer in effect); PA 219 of 2015 (no longer in effect as of July 1, 2018); and PA 141 of 2018.
    See also critical shortage position, core services.

WWC

Weekly workers' compensation. See workers' compensation.

years of service (YOS)

The years or fractions of years applicable to a member's pension while employed by a Michigan public school or an employer that participates in MPSERS. Years of service (YOS) may also reflect earned, granted, transferred, reinstated, and purchased service credit. Total YOS determines when a member will qualify for a pension. How much a member's pension will be is determined based on defined benefit plan service credit only. See also pension formula.

YOS

See years of service.