An Overview of the Michigan Educators Retirement System

The Michigan Educators Retirement System (MERS) is designed to provide competitive retirement and healthcare benefits, encouraging educators to plan effectively for their future retirement. The system encompasses several plans, each with unique features and benefits tailored to different periods of service and contribution options.

Roles and Responsibilities

During an educator's career, their employer manages key aspects of the pension plan, including deductions, wage and service record maintenance, and the handling of any additional contributions. Concurrently, educators have the option to enroll in the State of Michigan 401(k) and 457 Plans (referred to as "the Plans") to supplement their pension with additional retirement savings. The Michigan Office of Retirement Services (ORS) administers these supplemental plans, while Voya Financial manages the daily operations.

Pension Plus and Pension Plus 2 Plans

The Pension Plus and Pension Plus 2 plans offer a hybrid approach to retirement planning by combining a traditional pension component with a savings component.

Defined Benefit (DB) Component

The pension component, also known as Defined Benefit (DB), guarantees a retirement income upon meeting specific age and service requirements. This provides a predictable and stable income stream during retirement.

Defined Contribution (DC) Component

The savings component, also known as Defined Contribution (DC), offers a flexible and transferable retirement savings account. This account features a 50% match from the employer on the first 2% of employee contributions, incentivizing additional savings.

Read also: History of the Block 'M'

Accessing Plan Information

Members of the Pension Plus or Pension Plus 2 retirement plans can find comprehensive information about both the pension and savings components, along with links to their online accounts, at MiPensionPlus.org.

Legacy Defined Benefit (DB) Pension Retirement Plans

For educators who began their service within the Michigan Public School Employees' Retirement System before July 1, 2010, the Michigan Office of Retirement Services (ORS) provides two Defined Benefit (DB) pension retirement plans. These are the Member Investment Plan (MIP) and the Basic Plan.

Member Investment Plan (MIP)

Educators are enrolled in the Member Investment Plan (MIP) if they elected this plan during enrollment periods or if their initial employment within the retirement system occurred on or after January 1, 1990, but before July 1, 2010. The MIP encompasses five distinct benefit structures:

MIP Fixed
MIP Graded
MIP Plus
MIP 7%
MIP DC Converted

Basic Plan

Educators are enrolled in the Basic Plan if they began their public school employment before January 1, 1990, and did not elect the MIP during the designated enrollment periods. The Basic Plan includes three benefit structures:

Basic
Basic 4%
Basic DC Converted

Historical Context

Prior to 1974, both employers and employees contributed to the pension fund, characterizing it as a contributory plan. The MIP was subsequently introduced in late 1986, with an effective date of January 1, 1987, allowing existing Basic Plan members to opt-in.

Plan Closure and Legislative Changes

Both the MIP and Basic plans were closed to new members starting July 1, 2010. Public Act 300 of 2012 introduced provisions for MIP and Basic Plan members to modify their contributions to the pension fund, allowing them to increase, maintain, or stop contributions.

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