Act 332 of 2013 allows active members who participate under the non-contributory benefit provisions to elect coverage under the contributory benefit provisions. If members elect contributory coverage, the effective date is the first payroll period that is paid and reported in the next month after their contributory election. The election covers only future service, and the election cannot be revoked.
Members participating under the contributory benefit provisions make a tax-deferred contribution to the System of 5% of their annual salary. Members do not pay taxes on these contributions until they withdraw them from the System in the form of a monthly annuity at retirement or a lump-sum refund upon terminating membership. Members who receive a termination refund also forfeit any service they have earned.
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