State of Michigan Employee Retirement

The State of Michigan offers a variety of benefits to its public employees. They offer health, dental, vision, life, and disability insurance, as well as flexible spending accounts for tax-advantaged health and dependent care savings. The state also has a couple of retiree health plans, and many locally-administered pension systems.

Retirement Health Insurance

The Michigan Office of Retirement Services (ORS) administers two retiree healthcare plans: the premium subsidy benefit and the Personal Healthcare Fund. The premium subsidy benefit is a plan where the retirement system pays a percentage of your monthly insurance premiums (or a percentage of the maximum subsidy for some deferred members). The cost of coverage and conditions of enrollment will vary depending on several factors, which are covered in detail on the ORS website. If you enroll in insurance, your share of the premium is deducted from your monthly pension payments. If your pension is less than the premium amount, you must pay for the remainder of the premium. The Michigan Office of Retirement Services (ORS) will bill you for the remainder of the premium and send you payment coupons to submit with your monthly payments.

The Personal Healthcare Fund is a plan where the retirement system provides a fixed amount of money to eligible retirees to help pay for healthcare expenses. The amount of money provided is based on the retiree’s years of service and the type of retirement plan they are enrolled in. If you have the Personal Healthcare Fund, you are not eligible for subsidized health, prescription drug, dental, or vision insurance through the retirement system.

Michigan Retirement Benefits

The Michigan State Employees’ Retirement System (SERS) provides retirement, survivor, and disability benefits to the state’s government employees. The state has two different retirement plans for its employees: a Defined Benefit Plan and a Defined Contribution Plan.

The Defined Benefit Plan is for employees who were hired before March 31, 1997, and have elected the DB Classified Plan under Public Act (PA) 264 of 2011 or the DB 30 Plan under PA 264 of 2011 and have not yet reached 30 years of service.

The Defined Contribution Plan is for employees who were newly hired by the State of Michigan on or after March 31, 1997, or began their state employment under the Defined Benefit Plan and chose to transfer to the DC Plan under Public Act 487 of 1996

The SERS DC plan provides an automatic deposit into an employee’s 401k (or similar account) equal to 4% of that person’s salary; the State also matches up to an additional 3% of pay, for a maximum total State cost equal to 7% of salary for the DC plan (retirement savings only, not inclusive of retiree health care or other retirement benefits)