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Retirement and Service Credit

Employees planning to retire should log on to their ORS MI Account (www.michigan.gov/orsschools) to check their years of service credit, run pension estimates, etc., to get the most accurate information to assist in the making of their decision. Once the decision to retire is made, ORS prefers that all retirement applications be done online. With that in mind, 3 to 6 months prior to their retirement effective date employees should go to their ORS MI Account page and do the Online Retirement Application. If you have questions regarding the process or need assistance, please contact the Benefits Specialist.

TDP (Tax Deferred Purchase) – Service Credit Purchase

Employees in the MIP or BASIC retirement plans are eligible to purchase additional service credit towards their retirement. To get the complete information regarding purchasing service credit please visit the Michigan Public School Employee Retirement System website at www.michigan.gov/orsschools.

Those employees interested in purchasing Universal Service Credit must go online to their ORS MI Account and request a billing statement through their Message Board. Anyone interested in purchasing Parental Leave credit, Military Service credit, Out of System credit, etc., should go to the Forms and Publications tab on the ORS home page and print out the application. Once the application is completed, it should be returned to the Office of Retirement Services. When the employee receives the billing statement, if they intend to purchase the available service credit via payroll deduction, they should come to the payroll department to complete the payroll authorization form. Payments made through payroll deduction are tax deferred (not subject to federal or state withholding taxes).

To increase a TDP deduction, the employee should contact the Benefits Specialist or Payroll Manager. A TDP Change Form will be sent to the employee and the completed form should be returned to the payroll department as soon as possible. Any increase in the TDP deduction is a permanent increase.

MPSERS – Michigan Public School Employees Retirement System

(also known as ORS – Office of Retirement Services)

Retirement eligibility guidelines for MIP or BASIC employees for a regular retirement are 30 years of service, and for MIP members a minimum age of 46, BASIC members must be at least 55. MIP members are also eligible to retire at age 60 with 5 years of service. BASIC members can retire at age 60 with 10 years of service. In general, you earn one year of service when you work 1,020 hours within the July 1 through June 30 school fiscal year. You can earn no more than one year of service in any given school fiscal year. For instance, administrative staff may work 2,080 hours a year, but will be limited to one year of service because the annual cap is 1,020 hours.

For more detailed information or eligibility guidelines for the Pension Plus or Defined Contribution plans, visit the official website at www.michigan.gov/orsschools.

Early retirement guidelines

Whether you are Basic or MIP, you can take an early reduced retirement as early as age 55 if you have at least 15 but less than 30 years of service. Your pension amount is permanently reduced by one-half of one percent for each month and fraction of a month you take your pension before age 60 (6 percent per year). You must be an active member to be eligible for the early reduced retirement. An active member is someone who is still working under the retirement system and earning creditable service. If you terminate employment before the month you reach pension eligibility age, you become a deferred member, rather than an active member. Deferred members don’t qualify for the early reduced pension.

To retire under the early reduced provision, you must meet all of the following conditions:

  • You worked in the month of your 55th birthday (an exception may apply if you were born in a summer month).
  • You have at least 15 but fewer than 30 years of service, with at least 10 years of service earned under this system.
  • You earned creditable service in each of the 5 school fiscal years before—including the month immediately before—your retirement effective date. The fiscal year in which you are retiring counts in the 5 years.
  • You terminated Michigan public school service immediately before your retirement effective date.

If you’re thinking about an early reduced retirement, be sure to verify you meet these requirements before you terminate employment to be sure you qualify.