Updated October 30, 2026. Quick answer: Michigan MPSERS Member Investment Plan (MIP) retirees get a fixed 3% increase each October 1, so the 2027 figure is already set at 3%. The first increase comes on the first October 1 that is at least one full year after the retirement allowance begins. The increase does not compound but it does accumulate. Basic Plan retirees should not plan on a scheduled increase.
Estimate a Michigan MPSERS Member Investment Plan pension from service, age and final average compensation: Michigan MPSERS MIP retirement calculator.
More on public pension retirement ages and eligibility: the Michigan MPSERS retirement age and eligibility rules.
How the MPSERS increase works
Section 43c of the Public School Employees Retirement Act says: “An annual increase in the retirement allowance. The first increase will occur on the first October 1 that is at least 1 full year after the effective date of the retirement allowance.” On the amount, the Act says: “Subsequent annual increases will occur on October 1 of each subsequent year. The amount of the annual increase shall be equal to 3% of the retirement allowance that would be payable as of the date of the increase without application of this subdivision.” “However, if the retirement allowance is being paid under section 85(2), the increase shall be based on the retirement allowance that would have been paid under the payment option selected by the member under section 85(1).”
The Office of Retirement Services (ORS) puts it this way: “As a Member Investment Plan (MIP) retiree, after you’re retired a full year, you’ll receive a fixed 3% increase in your monthly pension each October.” It adds: “Your post-retirement increase doesn’t compound, but it does accumulate.”
Who is covered and who is left out
The Act applies the increase to “A member other than a member who first became a member on or after July 1, 2010 who contributes to the member investment plan, or the retirement allowance beneficiary of that member, shall be entitled to all of the following:”
ORS tells another group: “If you’re a Basic Plan retiree, you should not plan on a scheduled post-retirement increase.” This page covers MIP retirees and their survivors under the pension plan run by ORS. The sources read do not address Pension Plus plans, so this page makes no claim about them.
One gap to know about: the ORS page and booklet say “MIP retiree”, while the Act clause quoted above carves out a member who first became a member on or after July 1, 2010 and who contributes to the member investment plan. The sources do not reconcile the two, so eligibility here follows the Act as written.
The latest increase and where 2027 stands
The 2027 MPSERS increase is already set by statute at 3% each October 1, so there is no yearly vote or index to wait for, and this page updates only if the Legislature changes the statute.
ORS gives a timing example: “For example, if your retirement effective date is Dec. 1, 2025, your first increase will be in October 2027.” One gap to know about: no document read prints the 2026 October increase as a dated event. The 2026 increase is the same fixed rule applied that year, not a separately announced figure.
A worked example
As a computed illustration (not a source figure), a retiree whose initial pension is $1,000 (invented, for the computation) a month would see a 3% increase of $30 (computed) a month, because the Act figures the increase on the allowance payable without the increase. Because the increase does not compound, each later October adds another $30 (computed) in this example.
Common mistakes
- Waiting for an announcement. The 3% is fixed in the Act, so no board vote or index sets it each year.
- Expecting an increase in the first year of retirement. The first increase comes on the first October 1 at least one full year after the allowance begins.
- Assuming every MPSERS retiree gets it. Basic Plan retirees are told not to plan on a scheduled increase, and a member who first became a member on or after July 1, 2010 and who contributes to the member investment plan is carved out by the Act’s wording.
Related: Michigan MPSERS retirement decisions, how public pension decisions work, and whether Michigan taxes pensions.
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Answer againSources
- Michigan Legislature, MCL Act 300 of 1980 (Public School Employees Retirement Act), rendered Oct 21, 2026: www.legislature.mi.gov
- Michigan Office of Retirement Services, Post-Retirement Increases: www.michigan.gov
- Related official page (not quoted): IRS Tax Topic 410, Pensions and annuities: www.irs.gov
- Related official page (not quoted): IRS Tax Topic 411, Pensions: the General Rule and the Simplified Method: www.irs.gov
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.