State Teacher Plans for Michigan

Many teachers do not have access to low-cost choices in their 403(b) plans. Of the 529 district 403(b) plans that we have graded so far in Michigan, 0 districts have an A rating, 0 districts have a B rating, 326 districts have a C rating, 139 districts have a D rating, and 64 districts have an F rating.

If you are a teacher in Michigan, here are the state teacher plan options that are available to you.

Michigan MPSERS

Most states still offer a traditional formula-based pension. Under this type of arrangement an educator would receive a percentage of their final year's salary until death that is based on some combination of years worked, age, and salary. Some states have made pension plans less generous to new hires, and some states have replaced traditional pensions with 401(k)-type plans.

More information about the Michigan MPSERS plan is available directly from the pension website, and Karl Fisch's book on the Michigan pension is available here. Pension plan information for other states is also available for reference through this state pension search tool. This data is shared with us by Karl Fisch, and it is current as of January 1, 2025.

Applicable to All Teachers

Social Security

Michigan teachers also pay into Social Security

Administrative Fee for Supplemental Plans

$38 per year for 457 and defined contribution 401k

New Teachers Hired On or After 1/1/2024

Choice of Hybrid Defined Benefit or Defined Contribution

Employee: 6.2% for defined benefit and 5% for defined contribution
Employer: varies for defined benefit and 9% for defined contribution

Multiplier

1.5% for defined benefit

Average Salary

Highest 60 consecutive months for defined benefit

Normal Retirement

Age 60 with 10 years of service for defined benefit

Cost-of-Living Adjustment (COLA)

None

Veteran Teachers Hired Prior to 1/1/2001

There are 8+ additional benefit tiers between the new teacher and veteran teacher tiers compared here. The exact transition dates between these tiers are not relevant to this comparison.

Choice of Defined Benefit or Defined Contribution

Employee: 3 to 7%; Employer: 20.96 to 31.36%

Multiplier

1.25% to 1.5%

Average Salary

Highest consecutive 36 months

Normal Retirement

Varies by plan

Cost-of-Living Adjustment (COLA)

Varies by plan

Michigan 457(b)

Every state operates a 457(b) plan that serves governmental workers like police, fire, and state government officials. These plans are generally excellent, and in many cases they are superior to the 403(b) offerings available in school district plans. Most states allow educators to participate in these plans; unfortunately, about a dozen do not.

Find out more about how we rate state 457(b) plans and view plans in other states.

Green Michigan Office of Retirement Services (401k) and 457(b))

Michigan teachers are eligible to contribute to this plan.

Fees

0.00% admin fee, $34 account fee, and a low index fee

Record Keeper

Voya

Target Date Fund

State Street

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