MPSERS Reform Election Changes – Starting with 2/22/13 paycheck

Jan 25, 2013 | Intercom

This is an update on the MPSERS Reform election which ended on 1/9/13.  All elections were tabulated by MPSERS and sent to NMC so that we could begin the work of incorporating them into your payroll deduction records.  The guidelines from MPSERS instructed employers to begin the new deductions on the paycheck where the entire pay period occurred in February, which for NMC will be the paycheck dated 2/22/13.
Just as a reminder, this is what you can expect in your deductions effective with the 2nd paycheck in February dated 2/22/13.
Health Care Election
  1. If you elected the Premium Subsidy Option for healthcare, your contribution will remain 3%.
  2. If you elected the Personal Healthcare Fund Option for healthcare, your contribution will be 2% going into a 457 account, and NMC will match 2% into a 401(k) account, both administered by ING.  You may opt out of your contribution, but NMC’s contribution would end as well.  You can increase your 2%, but NMC’s will remain at 2%.  Your contributions to date to the Premium Subsidy Plan will be deposited in your 401(k) account.

Retirement Plan Election

  1. If you are in the Pension Plus Plan and eligible to make an election, you only had the Health Care Election and your other contributions remain the same.
  2. If you elected Option 1, your pension calculation will remain unchanged at the 1.5% factor, and
    1. Basic Plan members will begin contributing 4%
    2. MIP-Fixed, MIP-Graded, and MIP-Plus Plan members will begin contributing 7%
  3. If you elected Option 2, your pension will be calculated at the 1.5% factor for the years before your attainment date and 1.25% factor for the years after your attainment date of 30 years of credited service, and
    1. Basic Plan members will begin contributing 4%, but will revert back to 0% contribution when you reach your attainment date of 30 years of credited service
    2. MIP-Fixed, MIP-Graded, and MIP-Plus Plan members will begin contributing 7%, but will revert back to your current contributions when you reach your attainment date of 30 years of credited service (see #4 for the current contribution levels)
  4. If you elected Option 3, your pension will be calculated at the 1.5% factor for the years before your transition date (2/22/13 pay date) and 1.25% factor for the years after this pay date, and
    1. Basic Plan members will continue at 0% contribution
    2. MIP-Fixed Plan members will continue at 3.9% contribution
    3. MIP-Graded Plan members will continue at the graded scale of 3% up to $4,999.99 in pay, 3.6% from $5,000 to $14,999.99 in pay, 4.3% for $15,000 and above in pay
    4. MIP-Plus Plan members will continue at the graded scale of 3% up to $4,999.99 in pay, 3.6% from $5,000 to $14,999.99 in pay, 6.4% for $15,000 and above in pay
  5. If you elected Option 4, you will receive a 4% contribution to a 401(k) account administered by ING.  You will have no contribution, but can choose to contribute to a 457 account also administered by ING.  Whether you contribute or not, the 4% NMC contribution will continue.

If you have elected any of the options which have accounts with ING, you are immediately vested in your contributions and related earnings to your healthcare savings in your 457 account. You are 50 percent vested in your employer’s matching contributions after the equivalent of 2 years of full time service, 75 percent after 3 years of service, and 100 percent after 4 years of service. Your vesting for your employer’s contributions begins with your first day of work, so all of your Michigan Public School Employees Retirement System service counts towards your vesting.

If you elected Option 4 for the Defined Contribution (DC) Plan, you may still be eligible for a pension when you become age-eligible, based on years of service, final average compensation (FAC) and 1.5 percent pension factor as of the day before your transition date, provided you have an equivalent of 10 years of credited service, including both time before and after 2/22/13.  You will also be eligible for your state-sponsored 401(k) and 457 accounts, which would include your 4 percent employer contributions (made to your 401(k) account), any personal contributions you made to your 457 account, and any accumulated investment earnings.  Vesting rules apply for NMC contributions.

If you are currently purchasing service, these agreements remain in place and are irrevocable, even if you elected Option 4 for the DC Plan, but all time purchased will be added to your current years of service at the 1.5% factor.

Thank you for your participation in the reform election and your attention to the many notices and alerts during this time.