EVIP Requirement 3:
|To qualify for the Employee Compensation portion of the EVIP, eligible local units must:
- Certify to the Michigan Department of Treasury that by May 1, 2012 they have developed an employee compensation plan, which they intend to implement, with any new, modified, or extended contract or employment agreement, for employees not covered under contract or employment agreement; and that the plan has been made available for public viewing in the clerk's office or posted on a publicly accessible Internet site.
- Submit a copy of their employee compensation plan, in accordance with the provisions of Public Act 63 of 2011, section 951(3)(c), to the Michigan Department of Treasury.
Per Public Act 63 of 2011, Section 951(3)(c), at a minimum the employee compensation plan shall include the following:
- New hires who are eligible for retirement plans are placed on retirement plans that cap annual employer contributions at 10% of base salary for employees who are eligible for social security benefits. For employees who are not eligible for social security benefits, the annual employer contribution is capped at 16.2% of base salary.
- For defined benefit pension plans, a maximum multipler of 1.5% for all employees who are eligible for social security benefits, except, where postemployment health care is not provided, the maximum multiplier shall be 2.25%. For all employees who are not eligible for social security benefits, a maximum multiplier of 2.25%, except, where postemployment health care is not provided, the maximum multiplier shall be 3.0%.
- For defined benefit pension plans, final average compensation for all employees is calculated using a minimum of 3 years of compensation and shall not include more than a total of 240 hours of paid leave. Overtime hours shall not be used in computing the final average compensation for an employee.
- Health care premium costs for new hires shall include a minimum employee share of 20%; or, an employers's share of the local health care plan costs shall be cost competitive with the new state preferred provider organization health plan, on a per employee basis.
Employee Compensation Report (click to view)