The Michigan Public School System offers its employees Defined Benefit pension plans, a Pension Plus plan and a Defined Contribution plan. The plan an employee is enrolled in depends on when they began working at a Michigan public school, per the Office of Retirement Services.Continue Reading
Employees who began working after July 1st, 2010 are on the Pension Plus or Defined Contribution plan. Pension Plus is a hybrid plan that offers both a pension and savings component to employees, according to the Office of Retirement Services. In a defined contribution plan, the employer sets aside money every year from an employee's earnings and then invests it based on the employee's preferences.
People who started working at a Michigan public school before July 1st, 2010 are either on a Basic Defined Benefit Plan or Member Investment Plan. There are three types of Basic Plans with different pension factors, vesting and DB pension contributions, notes the Office of Retirement Services.
There are also five different Member Investment Plans, with an employee's start date and working history determining the plan they are on. These plans have more generous benefit options than the Basic Plan, states the Office of Retirement Services. All Member Investment Plans come with the same qualification rules, but the contribution rates vary.Learn more about Financial Planning