In the MSERS defined-contribution plan, the state employer contributes an amount equal to 4 percent of each employee’s pay to the employee’s retirement account. The employee also receives an additional 100 percent employer match on the next 3 percent of pay that he or she voluntarily contributes.[*]
To address the question of whether this plan has saved taxpayers money, the brief analysis below falls into three categories:
Each of these categories is examined in turn below. The analyses are based upon certain simplifying assumptions. Different assumptions could yield materially different results.
[*] “State of Michigan 401(K) & 457 Plans Key Features” (Michigan Office of Retirement Services), https://stateofmi.ingplans.com/csinfo/pdfs/forms/ michigan/640002/key_features.pdf (accessed September 23, 2009). An employee’s maximum annual contribution is “[t]he lesser of $16,500 or 100% of compensation.” Ibid.