Economic Vitality Incentive Program (EVIP) and PA 152

In 2012 statutory revenue sharing was eliminated and replaced by the Economic Vitality Incentive Program (EVIP). EVIP has three categories: Accountability & Transparency, Consolidation of Services, and Employee Compensation, which will become “Unfunded Accrued Liability Plan” effective October 1, 2013.

DUE DATES:

CATEGORY 1, Accountability & Transparency: October 1
CATEGORY 2, Consolidation of Services: February 1
CATEGORY 3, Unfunded Accrued Liability Plan (formerly Employee Compensation): June 1

To qualify for each category, the local unit must meet strict public viewing/notice requirements and provide the proper official certifications forms to the Michigan Department of Treasury by the due date for each category.

Category 3 will change from “Employee Compensation” to “Unfunded Accrued Liability Plan” effective October 1, 2013. Visit the state’s website for detailed information, forms, and requirements. In summary, the Unfunded Accrued Liability Plan will require a local unit of government with unfunded accrued liabilities in pensions or other post-employment benefits (as of its most recent audited financial report) to submit a plan to lower related liabilities. The plan must include a listing of previous steps take, estimated savings that resulted, a description of how implementation will continue, and additional actions that could be taken. Actuarial assumption changes and issuance of debt instruments shall not qualify as a new proposal within this category. Options for those not taking action, or those without unfunded liabilities, are provided as well. The plan must be made available in the Clerk’s office or on the website.

Detailed EVIP requirements/reports, forms, templates, etc. are available on the state’s website.

PA 152

Late August, 2011 brought significant change for public employers through Public Act 152 (PA 152) which creates a hard cap on the amount a public employer may contribute to a medical benefit plan for its employees and/or elected officials. PA 152 provides an option to elect an 80% contribution cap rather than the hard cap, and it contains a provision to allow a local unit to opt-out entirely. Compliance with PA 152 (including opt-out) does satisfy a local unit’s requirement related to the 3rd category of EVIP (see EVIP information above.)

The State released new hard cap amounts on September 18, 2012 which will apply to medical benefit plan years beginning on or after January 1, 2013. This represents an increase of 3.5%.

PLEASE NOTE: Treasury has modified its FAQs related to PA 152 and several items no longer conform to information provided in educational sessions with Treasury, or in their original FAQs. We are working with Treasury to resolve these conflicts but strongly caution that you work directly with Treasury on compliance questions. Clarifying legislation has passed the senate (senate bill 395) and will hopefully be finalized late summer, 2013.

Frequently Asked Questions on PA 152 - Michigan Department of Treasury

Sample PA 152 Resolutions

80/20:
Novi

Hard Cap:
Grosse Pointe

Opt Out:
Battle Creek
Bronson
Empire
Essexville
Saugatuck

Questions? Contact the League at info@mml.org