Employees first hired on or after January 1, 2012 become qualified participants in the Defined Contribution Personal Healthcare Fund plan. They will receive a 4 percent employer contribution to the State of Michigan 401(k) plan starting with first paycheck. In addition they are eligible for a dollar-for-dollar match up of up to 3 percent of pay. Employees hired on or after April 1, 2012 will automatically be enrolled in a 3 percent contribution to their 401(k) for the purpose of the matching program, beginning with their first paycheck.
Healthcare is not offered to employees first hired on or after January 1, 2012. Instead, all new employees, including former members of MPSERS, will receive an employer match up to 2 percent into a separate account within the State of Michigan 401(k) that can be used to pay healthcare expenses in retirement. At termination employees who have at least 10 years of service will receive a credit into a Health Reimbursement Account (HRA) The credit will be $2,000 for qualified participants who are at least 60 years of age, or $1,000 for qualified participants who are under the age of 60. Qualified participants with less than 10 years of service are not eligible for any credit to an HRA.
Employees first employed on or after January 1,2012 are eligible for any applicable supplemental benefit in the event of a duty death or duty disability (no vesting required or a non-duty disability (10 years vesting required). Subsidized health insurance coverage is not provided but may be purchased by the employee at his or her own expense, under certain conditions.
If a DB member elects to opt-out of the DB plan, they will continue accruing time towards vesting in their DB pension. Employer continues to report the member and pay DB health care contributions.
If a DB member terminates employment and is rehired after January 1, 2014, they will retain their DB pension only if they are vested (i.e., have at least 10 years of service). If they are not vested, they are no longer a member of the SERS DB plan and must participate solely in the NCAs retirement system.
The Business Enterprise Program (BEP) and Mackinac Island State Park (MISP) participate only in the SERS retirement system. They follow the same new hire and rehire rules as State of Michigan (SOM) employees. We consider a change of employment between the SOM, MISP and BEP a transfer of employment as long as there was no break in service.
Deferred members who are reemployed by the state on or after January 1, 2012 become members of the Defined Contribution plan as of the date of their rehire. They will receive a 4 percent employer contribution to the State of Michigan 401(k) plan starting with their first paycheck upon rehire. In addition they are eligible for a dollar-for-dollar employer match up to 3 percent of pay. When the employee meets eligibility requirements they will qualify for a pension based on their Final Average Compensation and years of service in the DB plan, as of the date they terminated employment as a DB member.
These employees retain eligibility for DB Healthcare, as well as eligibility for retiree death and disability benefits offered by the State.
Any non-vested member who made the retirement plan election during the 2012 election window and is reemployed by the state on or after January 1,2012 and former non vested members who are reemployed by the state on or after January 1,2012 and before January 1, 2014 become qualified participants in the DC plan as of the date of their rehire. They will receive 4 percent employer contributions to the State of Michigan 401(k) plan as well as a 3 percent match. Employees hired as of April 1, 2012 will automatically be enrolled in the matching contribution.
Time accrued as a DC member can be used for vesting purposes in the DB plan. If the participant earns sufficient SC for vesting, and meets the age and service requirements, they would be eligible for a pension based on their Final Average Compensation and years of service in the DB plan as of the date they terminated employment as a DB member. Once the member has earned at least 10 years of service they will be eligible for the DB retiree health benefits offered by the State. These members retain their eligibility for retiree health and disability benefits offered by the State.
Former non vested members who are reemployed by the State on or After January 1, 2014 become qualified participants in the DC plan as of the date of their rehire. They will receive 4 percent employer contributions to the State of Michigan 401(k) plan as well as a 3 percent match. Employees hired as of April 1, 2012 will automatically be enrolled in the matching contribution.
These members are not eligible for a pension, or subsidized retiree health insurance.
These employees will participate in a Personal healthcare fund that can be used toward healthcare expenses in retirement. The fund consists of automatic enrollment in a dollar-for-dollar match up to 2 percent of pay into a 401(k) account, and a credit into a Health Reimbursement Account (HRA) at termination. The credit will be $2,000 for qualified participants who are at least 60 years of age, or $1,000 for qualified participants who are under the age of 60. Qualified participants with less than 10 years of service are not eligible for any credit to an HRA.
These employees are eligible for any applicable supplemental benefit in the event of a duty death or duty disability (no vesting required) or a non-duty disability (10 years vesting required). Subsidized health insurance coverage is not provided but may be purchased by the employee at his or her own expense, under certain conditions.
Former qualified participants with 10 or more years of service as of December 31, 2011, who are reemployed by the state on or after January 1, 2012 and before January 1, 2014 will have 60 days after the first pay date to elect whether they wish to have the graded premium subsidy insurance, or the personal healthcare fund. If they choose the personal healthcare fund, their lump sum credit will be calculated based on the value of their retiree health benefits and years of service as of March 31, 2012, along with an annual interest credit. Those reemployed on or after April 1, 2013 will receive their first interest credit retroactively. Employer Reporting will administer this election. If an election is not made within 60 days, they will remain in the Graded Subsidy Plan.
Former qualified participants with 10 or more years of service who are hired on or after January 1, 2014 do not have an election between the subsidy and personal healthcare fund. They will automatically be placed in the personal healthcare fund and be eligible for a lump sum payment upon retirement. The lump sum amount is based on the value of retiree health benefits and employee's years of service as of March 31, 2012 along with an annual interest credit. Annual Interest is applied retroactively, beginning with the first posting of March 31, 2013. ER Analyst will calculate member's initial lump sum amount and add member to spreadsheet.
Qualified participants with 10+ years of service as of their rehire date are eligible for any applicable supplemental benefit in the event of a duty death or duty disability (no vesting required) or a non-duty disability (10 years vesting required), and are also eligible for any applicable health insurance premium subsidies under those provisions.
Former qualified participant with less than 10 years of service as of December 31, 2011 who are reemployed by the State on or after January 1, 2012 will participate in the Personal Healthcare fund. They will not be eligible for a lump sum payment, but rather a $1000 or $2000 credit to an HRA upon retirement. A member who terminates service with at least 10 years and who is over the age of 60 will receive a $2,000 credit into an HRA while members with 10 years, under the age of 60 will receive $1,000.
These participants are eligible for any applicable supplemental benefit in the even o a duty death or duty disability (no vesting required) or a non-duty disability (10 years vesting required). Subsidized health insurance coverage is not provided but may be purchased by the employee at his or her own expense, under certain conditions
Former DC members who made the election in 2012 to opt out of the Graded Premium Subsidy and into the Personal Healthcare Fund will be eligible for the 2 percent matching contribution upon rehire, but would not be eligible for a lump sum payment as they already received the payout at their first termination of employment if qualified.
Former qualified participants who elected to stay in the Graded Premium Subsidy in 2012 (or made no election and therefore defaulted) will return to the graded premium subsidy and continue to accrue credit towards the subsidy amount.
As long as the participant made a valid election prior to termination, they will retain their election choice upon rehire, regardless of if they terminated prior to the effective date of 4/1/12. If a participant did not receive monetized payout at first termination, they can receive payout upon future termination, if qualified.
Former DB to DC transfers who are rehired after 01/01/2012 will remain in the DC plan, and retain the DB healthcare plan.