HB 6475 Summary

• Establishes a Tier 2 defined contribution retirement plan for Michigan State Police members hired on or after June 10, 2012, requiring 2% employee contributions with 50% employer match and allowing self-directed investment choices.

• Changes final average compensation calculation for new members from 2-year average to 5-year average and reduces retirement benefit accrual to 2% per year of service (capped at 25 years), with additional reductions for service exceeding 30 years.

• Increases employee pension contributions for pre-June 10, 2012 members from current rates to 1% effective October 1, 2012, and an additional 1% effective October 1, 2013, with state pick-up of these contributions.

• Implements minimum contribution rate floors beginning fiscal year 2019, requiring normal cost contributions and employer unfunded liability contributions to not decrease year-over-year, with full unfunded actuarial liability payoff required by September 30, 2038.

• Modifies health insurance benefits for new members by eliminating retiree health premium subsidies and replacing with $2,000 health reimbursement account credit for members with 10+ years of service, effective implementation by September 30, 2019.