MARSP-MPSERS History

1915         

Legislature established teacher retirement law. 

1917

First benefits paid under that law. 

1927

Law inadvertently repealed.

1929

Law re-enacted.

1937

Public Act No. 184 enacted - Legislature began to contribute to the fund. Minimum allowance set at $600 per year and maximum at $1,200 per year, based on salaries.

1941

Public Act No. 56 enacted - Other public school employees brought under law.

1937-45

Raised minimum to $750 and maximum to $1,800, with certain fringe and annuity to those above $1,800. New levels not made retroactive to those who retired before 1945.

1945

Public Act No. 136 enacted.

1951

Public Act No. 205 enacted - extended social security old-age and survivor's insurance coverage to eligible public school employees who were members of the retirement system established under chapter 34.

1955

Public Act No. 246 enacted.

1956

Bill passed to correct inequity of 1945-56 by increasing minimum allowance, and recalculating the 1945-56 retirees.

1972

Legislation passed allowing retirees with less than $2,500 allowances to earn an additional $1,500 over amount allowed by Social Security without any loss in pension benefits.

1972

Public Act No. 258 adjusted base allowances for pre-1956 retirees from $2,400 to $3,000. Provided for retirement at age 55 with 30 years of service with no reduction. Post retirement adjustment of 1-15% for retirees between July 1, 1956 and July 1, 1972. Recognized need for a cost of living increase.

1974

A straight 1-1/2% benefit formula based on best five (5) consecutive years' salary times years of service credit. 10-year vesting. 1-17% increase for those retired between 1956 and 1973. $125 times years of service for pre-1956 retirees. Complete reciprocity between Detroit and outstate systems.

1974-77

Non-contributory system phased in with employer to pay the 5% contribution on behalf of the employee.

1975

Up to $25.00 payment of medical and hospitalization premiums for retirees and beneficiaries.

1975

Public Act 284 allowed college personnel who had elected to discontinue MPSERS for TIAACREF to reconsider reinstatement with a time limit.

1976

Employees with 15-29 years of service take early retirement between ages 55 and 60, subject to reduction of 1/2% per month for each month retired prior to age 60.

Court suit filed against State charging underfunding of system of 80-90 million dollars in violation of constitution.

Public Act 336 equalized Detroit and outstate systems in regard to community college service.

Public Act 391 required annual reporting on system and fund to each member, retirant and beneficiary.

Public Act 34 allowed credited service to include service while employed with University of Michigan, Michigan State University, Wayne State University, Oakland University, Grand Valley and Saginaw Valley with payment of appropriate contributions.

Public Act 35 allowed recomputation for employee who returned to full time public school employment for minimum of 5 years after drawing retirement allowance for a period of time.

Public Act 357 provided for (1) expansion of military service credit on buy-in basis, max five years, and (2) cost of living increase of 1-8% for retirees as of 10-1-76, and additional 1-8% as of 10-1-77.

1977

Resultant changes in the law are as follows:

1. Reinstated several sections inadvertently omitted from Senate Bill 122 when it passed in December of 1976.
2. Classified out of system service, the teaching of U.S. Nationals overseas.
3. Reinstatement in the retirement system after two years of employment (instead of five years) for those persons who left school employment.
4. Computation of military service credit "buy-in" on the basis of highest fiscal year compensation previously received, but not to exceed the member's final average compensation. 
5. Credit for military service for those persons eligible for service in the reserve. 
6. Clarifying amendments for Detroit school personnel while on professional leave from the Detroit schools who are working for employment organizations.
7. The opportunity to buy military service credit was made retroactive to June 1, 1976. When a person is eligible for retirement (15 years of service or 10 years of service and age 60) but is deceased before he/she does retire, the surviving spouse can apply for military service credit and/or out of system service credit (if the member met requirements for either of these), make the necessary payment; and then the allowance will be computed on total years of service.

1980

Public Act 300 - new retirement law. For retirees it:

1. Reverts pensions to regular retirement allowance for those retirants who chose Option 2 or 3, whose spouse has predeceased or predeceases them in the future. Such "pop-up" provision is applicable only to retirants whose effective date of retirement was on or after July 1, 1976. However, for retirants whose spouses have already died, the allowance will be adjusted only beginning the month following the effective date of this act. For those retirants whose spouses predeceased them after the effective date of the act, the allowance will revert to a regular allowance the first of the month after the death of the spouse.
2. For those survivor spouses of a member who died before retirement and whose retirement effective date is on or after the effective date of this act, the spouse may now remarry without loss of allowance. (Surviving spouses of a member who retired and chose Option 2 or 3 have always been able to have their allowance continued even though they remarry.)

1981

Public Act 133 provided health insurance subsidy for retirees to $52.00 per month.

1982

Public Acts 253 and 256 establish the 13th Check, including the "skim off" with a 2-year limitation.

1982

Legislation increased retirees' health insurance subsidy to $66.00 per month.

1983

Legislation (House Bill 4531) continued the "Skim-off" two more years.

Legislation (House Bill 4611) provided for full payment of insurance premiums for retirees in future and eliminated need for annual appropriation for authorization of payment. Insurance changes: $3.00 prescription co-payment; $50.00 deductible for medical expenses; additional nervous and mental benefits; recertification on private duty nursing; changes in chiropractic services; restricted enrollment periods; adjustments in non-Medicare retirees and spouses rates.

1984

Public Act 162 authorized the reinstatement of a survivor’s allowance which was terminated because of remarriage. Also removed the remarriage restriction for survivor allowance which commenced prior to 10-31-80.

1985

Public Act 91:

• Dependent/Spouse health insurance premium paid 90% by state 
• 8% increase in pension benefit for all retirees 
• 3% annual increase or 13th Check, whichever is greater 
• Recalculation of pension for pre-July 1, 1974, retirees to full 1-1/2% of final average compensation 
• Elimination of the 1/2% per month penalty for pre-July 1, 1974, retirants who had 30 years of service but were between 55 and 60 at retirement 
• Elimination of 6-28-76 date in pop-up clause, therefore allowing retiree whose designated beneficiary predeceases them to "pop up" to straight retirement allowance. 
• New part-time formula using average of equated full time compensation earned within a period of 60 consecutive months; current retirees were recalculated. 
• 80-point early retirement option.
• Established contributory Member Investment Plan which provides 
  • 30 and out 
  • 3 year final average compensation 
  • 3% annual increase 
  • full retirement with 5 years of service at 60 years of age (and still working) with last five years of service immediately preceding 
  • death benefit lowered from 15 years to 10 years 
  • Provided for purchase of maximum of 5 years of maternity, paternity, child rearing leave when followed by service as public school employee without other intervening employment.

1986

Formula for calculating 13th Check changed by placing a cap on the gain (loss) account. 13th Check refigured and a 14th Check with a unit value of $32.58 was issued in November of 1986 to everyone who had received a 13th Check in March, 1986. Total 1986 unit value was then $38.57.

1989

Public Acts 193 and 194 provided:

• Dental, vision and hearing insurance for school retirees 
• Provided for a 1-22% increase in base pension for pre-October 1, 1981, retirees 
• Added state treasurer to MPSER Board 
• Changed amount of earnings in retirement to 1/3 of final average compensation or Social Security limit--whichever is greater--and increases 1/3 of final average compensation each year by 5% to allow for inflation 
• Allowed generic service credit purchase up to 5 years, eliminated 22 other specific buy-ins previously allowed 
• Changed Member Investment Plan 
• Clarified the survivor benefit for the MIP member from the 1985 Public Act 91.

1990

Public Act 298 amended the section of the public school employee retirement system act pertaining to member investment plan contributions to provide a two year window into which certain members could elect.  

1991

Public Act 47 amended the section of the public school employee retirement system act pertaining to the assignment of member benefits under a domestic relations court order relative to the payment of alimony or child support.

Public Act 107 provided technical amendments to the public school employee retirement system act so as to conform the administration of the system to IRS requirements that the system be a qualified pension plan created in trust under Section 401 of the Internal Revenue Code and that the trust be an exempt organization under Section 501 of the Code.

1992

Public Act 158 amended the section of the public school employee retirement system act pertaining to the contribution rate for health benefits to provide that it should be computed using a cash disbursement method for FY 1992-93. Public Act 158 also included a new section in the act to provide a method for funding the differences between the estimated and actual aggregate compensation and the estimated and actual actuarial employer contributions for the next four (4) succeeding fiscal years.

1994

Legislature enacts sweeping changes to public education funding including the transference of retirement system funding liabilities directly to individual school districts.

1995

Retirement Board advocates determining amount of health benefits premium subsidy on length of public school service.

1996

Retirement Board replaces full choice of health care providers with a limited network of providers (Preferred Provider Network).

Retirement Board met with Director of Department of Management and Budget and State Treasurer and state intent to restructure and assume greater autonomy and authority to administer its statutory responsibilities in the beginning of the year. Early support provided by the Governor and DMB Director. In September support is withdrawn and Board/staff ordered to cease and desist in all restructuring activities.

Retirement Board adopts an initiative recommending where retirees should have major cardiac procedures.

MPSERS staff applies and receives approval from the Internal Revenue Service to allow service credit purchases on a tax deferred basis.

Passage of Act 488 P.A. 1996 removes State Treasurer from Retirement Board.

Executive Director resigns citing, in part, lack of progress on restructuring Retirement Board autonomy and authority.

Health Insurance Annual Deductible increased to $125 per person.

1997

Prescription drug co-pay increased to $8.00 for name brand drugs.

Executive Director Position eliminated bringing all public employee retirement plans administered by Department of Management and Budget under a single administrator.

1998

Legislation adding 75% survivor option.

Board created subcommittee/task force of Board members only to examine improvements of pension to help offset health care cost shifting.

Administrative changes made to accept tax deferred payments for service credit purchases.

Retirement Board implemented first ever retiree co-pay on dental preventative services.

Retirement Board increased health care plan annual deductible to $145 effective 1/1/99 and to $165 effective 1/1/00.

Retirement Board experiments with increased managing of the delivery of health care services by offering Health Maintenance Organizations (HMO’s) to retirees in selected portions of the State.

1999

Cancelled annual Board meeting format that had previously included special informational seminars on retirement system administration.

2000

Retirement Board increased prescription drug co-pay from existing $4 for generic drugs $8 for name brand drugs to a 20% of full drug cost with a minimum co-pay of $4 and a maximum co-pay of $20. The incentive to utilize mail order drug services reduced with new minimum of $10 and new maximum of $50.

2001

Retirement Board adopted a prescription drug formulary providing that only purchase of certain drugs to be reimbursed at 80% with other drugs reimbursed at only 60%. Retirement Board provides a first ever maximum out of pocket expense limit of $750 annually on prescription drugs.