Michigan Public Act 202 Update

If the Michigan Department of Treasury determined that one or more of your pension or OPEB plans was underfunded after you completed Form 5572 – Local Retirement Government System Annual Report, the Treasury will send a letter regarding their preliminary review of the underfunded status. An application to apply for a waiver will be attached to the letter. 

For each underfunded plan, a separate waiver application must be submitted. Local units have 45 days from the date of the letter to submit their application; otherwise, plans will be automatically deemed underfunded.

The application must describe steps that the local unit has taken to address the underfunding. This is not a prospective plan, but rather actions that local units have already done (closed plans, reduced benefits, obtained additional funding, etc.). The waiver application must be approved by the local unit’s governing body, and evidence of approval must be submitted with the application.

Once received, the Treasury will determine whether a waiver will be granted.

• If a waiver is granted, the Treasury will provide notification.
• If a waiver is not granted, corrective action (approved by the governing body) will be requested by the Municipal Stability Board within 180 days (with a possible 45 day extension). The Board will then approve or reject the corrective action plan within 45 days.

Please contact your Yeo & Yeo representative if you have questions.