Michigan Bill Would Amend Law on Default Option for New Public School Employees

The Michigan House has passed a bill that would amend the law governing the default option for newly hired public school employees. 

Rep. Matt Koleszar (D-Wayne) introduced House Bill 5021 on Sept. 20, 2023. The House acted fast, and passed it on Oct. 12, but by a narrow margin—by a 56-54 vote. 

The bill would amend The Public School Employees Retirement Act of 1979. It includes provisions that would: 

• Require that each qualified participant who first becomes a qualified participant and first works for a reporting unit shall receive a form describing benefit options by July 1, 2024. 
• State that a qualified participant who first becomes a qualified participant and first works for a reporting unit after Jan. 31, 2018 and before July 1, 2024 who does not make an election for any reason on or before the close of the election period is considered to have made an election to become only a qualified participant in Tier 2.
• Provide that a qualified participant who first becomes a qualified participant and first works for a reporting unit after June 30, 2024 and who does not make an election for any reason on or before the close of the election period is considered to have made an election to become a member of Tier 1 and would be eligible to accrue any service credit or qualify for any retirement allowance under Tier 1 under certain circumstances.

Status 

The bill was referred to the state Senate, and on Oct. 17 was referred to that chamber’s Committee on Education.