NEW EDUCATORS: DID YOUR RETIREMENT CHOICE JUST GET VOIDED?
NEW MPSERS SELECTION PROCEDURE HAS BEEN CHANGED
for the start of the 2018-2019 school year
Q1: I heard that newly hired public school employees have to choose between retirement plans. What plans do they choose between?
A1: They may choose between the Defined Contribution (DC) Plan and the Pension Plus 2 (Hybrid) Plan.
Q2: How long do they have to choose?
A2: The window to choose closes 75 calendar days after the employee’s first payroll date.
Q3: What if they don’t choose within the timeline?
A3: Not choosing IS a choice. Employees who make no decision have decided to take the Defined Contribution (DC) Plan.
Q4: What do they have to do if they want to choose the Defined Contribution Plan?
A4: Nothing. The DC Plan is the default.
Q5: What do they have to do if they want to choose the Pension Plus 2 Plan?
A5: Each district should have communicated the process they are using to its newly hiredemployees. The Office of Retirement Services has very recently decided that making elections through individual school district payroll departments is no longer a suitable process. My personal guess is that this is being driven by the fact that the default plan is now the Defined Contribution Plan, and far too many districts behaved unreliably during previous pension election cycles – but this is only speculation on my part.
The ORS will be communicating to all new hires the manner in which each must use his/her miAccount to choose to elect which plan they wish to take…and is asking everyone to affirmatively choose one plan or the other rather than simply default (although failure to choose by the close of the election window will still result in a default to the DC Plan).
They have also placed some information online at https://www.pickmiplan.org/ to assist new hires with their decision. This information is useful, but in no way a substitute for the information available through our New Hire Choices Made Easier training.
Q6: What if the district didn’t do this?
A6: That’s a problem. Individuals in districts that have failed to communicate their process needto contact their district’s payroll department. There is likely an election form that must befilled out and returned. This is no longer a concern, as individual districts will no longer play a role in the election process.
ORS will be sending multiple letters to individual new hires: the first upon ORS’s notification by the district of the new hire’s employment, the second when the new hire has roughly 50 days left to decide, and the third letter when the new hire has roughly 25 days to decide.
The new employees that were hired this year will not likely be receiving all three letters as they are already well on their way to the end of their election window.
Q7: If they choose the Pension Plus 2 Plan and change their mind within the timeline, can they go back to the DC Plan?
A7: No. All decisions are irrevocable – including the decision not to select between the two plans within the election window (which results in an irrevocable default into the DC plan). The only exception to this rule is if the employee made his/her election through his/her local school district and would currently still have an open election window. ALL INDIVIDUALS IN THE AFOREMENTIONED CIRCUMSTANCE ARE CONSIDERED NOT TO HAVE MADE AN ELECTION, AND THE ELECTION MADE THROUGH THEIR EMPLOYER IS NULL AND VOID.
Q8: That doesn’t seem fair. New employees have enough going on. They’re just figuring out their jobs. They shouldn’t have to think about which retirement plan they want to be in. They should be focused on learning their jobs.
A8: Yup. And public servants should make more money than professional athletes, healthcare and college costs should be fully subsidized by the government, and the three richest people in the country should not have more combined wealth than the bottom 50% of all Americans. What can I tell you? The law is the law, and elections have consequences.
A9: Yeah. Sorry about that.
Q10: Okay. I know that a person who is on an earlier retirement plan (ex. MIP) stays with that plan while they are working, but what happens when a person leaves a school district and takes a new job somewhere else? Do they have to choose between these new plans?
A10: They stay on their original plan. This is the case regardless of whether or not the member stays with their original district, changes districts, or quits entirely.
Q11: How many plans are there?
A11: Well, let’s see: Basic, Basic 4%, Basic DC Converted, MIP fixed, MIP Graded, MIP Plus, MIP 7%, MIP DC Converted, Pension Plus with Graded Premium Subsidy, Pension Plus with Personal Healthcare Fund, Defined Contribution (DC), and Pension Plus 2 plans…so… 12.
Q12: How does someone know what plan they are on?
A12: Their best bet is to enter their miAccount and see what ORS has on file. A slightly less reliable method would be to check the date of their very first employment by a MPSERS Reporting Unit on the attached MEA Overview – 40 years of MPSERS v2 document to see what plan they were assigned when they became a MPSERS member, then check against their memories regarding what choices they made during the various election periods that
have passed since then.
trainings and resources
must remain restricted to MEA members only.