MPSERS PA 300 Election: How the 2012 Reform Changed Your Pension

What PA 300 of 2012 Did

Public Act 300 of 2012 was the most consequential reform in MPSERS history. It gave existing Basic Plan and MIP members a one-time, irreversible choice about their future pension structure. The election window closed in 2012, and whatever you chose is permanent — there's no opportunity to change it.

The reform affected three things: your contribution rate, your pension multiplier for future service, and whether you stayed in the defined benefit system at all.

The Three Election Paths

Path 1 — Keep the 1.5% multiplier, pay more: Members who chose to maintain the full 1.5% pension multiplier for all future service agreed to increase their employee contribution rate. MIP members already paying into the system saw their rate rise, and Basic Plan members (who previously contributed nothing to the pension) began contributing.

Path 2 — Accept a lower multiplier, pay less: Members who chose the reduced contribution rate accepted a 1.25% pension multiplier for all service earned after the election date. Pre-election service kept the 1.5% multiplier, creating a blended rate at retirement. This path results in a lower monthly pension but left more in each paycheck during your working years.

Path 3 — Convert to Defined Contribution: Members who opted out of the DB pension entirely froze their accumulated defined benefit based on pre-2013 service. Going forward, they received a 4% automatic employer contribution plus up to 3% employer match in a Voya-administered 401(k) account. At retirement, they receive both a frozen monthly DB pension and their DC account balance.

How to Verify Your Election

Log into miAccount at michigan.gov/orsschools and check your Member Statement. Your plan tier and contribution rate are listed there. If you're paying the higher contribution and your records show a 1.5% multiplier for all service, you chose Path 1. If your post-2012 service shows a 1.25% multiplier, you chose Path 2. If you see a frozen DB benefit and active DC accounts, you chose Path 3.

If anything looks wrong, contact ORS directly. Errors in election records are rare but not unheard of, and they're much easier to fix before retirement than after.

How Your Election Affects Retirement

The biggest impact shows up in your pension estimate. Consider a member with 30 years of service and a $65,000 FAC:

• At 1.5% for all 30 years: $65,000 × 30 × 1.5% = $29,250 annual pension ($2,437/month Straight Life)
• At 1.5% for 22 pre-2013 years + 1.25% for 8 post-2012 years: ($65,000 × 22 × 1.5%) + ($65,000 × 8 × 1.25%) = $21,450 + $6,500 = $27,950 annual pension ($2,329/month Straight Life)

The difference: about $108 per month, compounding with each additional year of post-election service. For MIP members, the 3% annual post-retirement increase applies to either baseline — so the gap grows each year after retirement.

The Healthcare Dimension

PA 300 also restructured retiree healthcare. Members hired after February 1, 2018 (Pension Plus 2) receive only the Personal Healthcare Fund — no premium subsidy. But for pre-2012 members, the election itself didn't change their healthcare benefit. Your retiree health coverage (Premium Subsidy, Graded Premium Subsidy, or PHF) was determined by your original hire date and plan tier, not by which PA 300 path you chose.

One related change: the mandatory 3% active employee healthcare contribution is being eliminated effective October 1, 2025, under Public Act 127 of 2024. This doesn't change your election — it just means the payroll deduction stops.

For a tier-by-tier breakdown of how each PA 300 path interacts with payout options and healthcare eligibility, the MPSERS Retirement Guide walks through worked examples for each scenario.

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