LANSING – Gov. Rick Snyder Dec. 14 signed legislation extending the deadline for public school employees to make the best choice for their retirement. The deadline now is Jan. 9, 2013.
This legislation resolves the selection deadline issue that resulted from a recent court decision.. Michigan Public School Employees’ Retirement System (MPSERS) employees hired before July 1, 2010 have three choices for how to handle their retirement:
1 Contribute more and retain the 1.5 percent pension multiplier;
2) Contribute the same amount and receive a 1.25 percent pension multiplier for future service;
3) Freeze the existing benefit and convert to a 4 percent defined contribution, 401(k)-style plan.
Employees’ chosen option will take effect Feb. 1, 2013.
In addition, the legislation extends the deadline for employees hired prior to Sept. 4, 2012 to elect whether to participate in—and contribute to—the retiree health care plan. Members who wish to opt out of the retiree health plan—and the associated 3 percent contribution—will participate in a defined contribution health account that provides for an employer match of up to 2 percent.
“With the selection window now determined, I encourage MPSERS employees to decide which option is best for themselves and their families,” Snyder said. “The reforms from Public Act 300 provide more than $15 billion in relief from the massive liability that is strangling the system, which is vital for our children and their education, as well as for our school employees who need to know that their benefits are secured for the future.”
Senate Bill 1360, sponsored by state Sen. Roger Kahn, now is Public Act 359 of 2012.