Charters and Public School Academies
Governmental Accounting Standards Board (GASB)
Charters and Public School Academies
Employer Contributions Forfeiture Credit Campaign
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Reporting units may compensate employees as determined by their governing boards. However, not all compensation earned may be included in the calculation of an employee's final average compensation used to calculate defined benefits (DB), that is, pensions. The Public School Employees Retirement Act (Public Act 300 of 1980, MCL 38.1303(a)) defines the types of earned remuneration that is eligible to be included in a member's final average compensation. This chapter provides a summary of the retirement act's compensation definitions.
The retirement act, this manual, and the Michigan Office of Retirement Services (ORS) are the only sources for determining if compensation is consistent with the retirement statute and eligible to be included in a member's final average compensation. Some school employers may rely on consultants to set salaries, but employers should not assume that the consultants take the retirement law into consideration when making their recommendations.
Any compensation that is eligible to be included in a member's final average compensation (for the purpose of calculating pension payments) is reportable to the retirement system - it must be reported to ORS on a Detail 2 - Wage and Service (DTL2) record. Any compensation excluded from the above definition is not reportable on a DTL2 record but may be reportable on a Detail 4 - Defined Contributions (DTL4) record. The terms reportable and nonreportable in the Reporting Instruction Manual are based on the definition in the retirement act cited above, unless otherwise noted.
Some employees have the Defined Contribution (DC) plan or plans with a defined contribution component (Pension Plus, Pension Plus 2, or a Personal Healthcare Fund account). Contributions for the DC plan or plans with a DC component (DC contributions) are calculated on a different basis than DB contributions. For more information on reporting compensation for the calculation of DC contributions, see section 4.06: Gross earnings for defined contribution (DC) plans
Please note: Reportable and nonreportable compensation, as defined in the statute referenced above, only applies to active Michigan Public School Employees' Retirement System (MPSERS) members. For information on reporting earnings for retirees please see section 9.01: Earnings of retirees who return to work.
Last updated: 04/13/2012