Option to Purchase Service Credit Ends September 29

Bob Kefgen's picture

As part of the changes to the MPSERS system passed by the legislature in June, public school employees will no longer be able to purchase service credit after this September. The option to purchase years of service credit was closed to new employees when the legislature created the Pension Plus (hybrid) system, but was left open to those employees first hired before July 1, 2010.

All school employees who are members of either the Member Investment Plan (MIP) or the Basic Plan have until September 29, 2017 at 5:00 p.m. to take action if they wish to purchase service credit before the option is closed.

The following information published on the Michigan Office of Retirement Services website provides details and links to additional information:

Option to Purchase Service Credit Ending September 29, 2017

Public Act 92 of 2017, which became law on July 13, 2017, discontinues the option to initiate a service credit purchase. This portion of the law takes effect at 5:00 p.m. EDT, September 29, 2017. Active members of the Defined Benefit (DB) pension plan who still wish to initiate a service credit purchase must ensure that the Office of Retirement Services (ORS) receives either:

  • full payment for the amount of service they wish to buy, or
  • a fully completed Tax-Deferred Payment (TDP) Agreement (R0392C).

ORS must receive either full payment or the fully-completed Tax-Deferred Payment (TDP) Agreement (R0392C) by 5:00 p.m. EDT, September 29, 2017.

You may still receive service credit for time spent in active duty military service or if you repay refunded pension contributions after September 29, 2017. Any service credit purchase previously completed or tax-deferred payment agreements already in progress will not be impacted by this change in law. Information about the general rules for service credit purchases, types of service credit, and how to purchase are here.

Published July 14, 2017