Michigan Laws 38.2215 – Determination of actuarial cost; establishing method; calculation
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The retirement board and the department shall establish the method of determining the actuarial cost. The actuary shall calculate the actuarial cost based upon the product of the following elements:
(a) A percentage that when multiplied by a member’s compensation results in the average actuarial present value of the additional benefits resulting from the crediting of 1 additional year of service. The percentage may vary because of the member’s age, credited service, or plan member classification or the retirement allowance beneficiary‘s age.
Terms Used In Michigan Laws 38.2215
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
(b) A member’s compensation.
(c) The number of years and fraction of a year of service a member elects to purchase up to the maximum, if any.