Updated October 21, 2026. Quick answer: Michigan’s Office of Retirement Services says a Member Investment Plan retiree who has been retired a full year receives a fixed 3% increase in the monthly pension each October. The increase does not compound, and a Basic Plan retiree should not plan on a scheduled increase. The page gives its own worked example with a $1,200 monthly pension.
What this section covers
The Michigan Office of Retirement Services publishes a page headed Post-Retirement Increases for the Public School Employees’ Retirement System. It opens its first subsection with “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.” This page walks through that section and the Basic Plan paragraph beside it.
For the wider choices facing a member of this system, see Michigan MPSERS retirement decisions.
Who it applies to
The page splits retirees into two groups. For one group it says “Increases for MIP retirees” and for the other “Increases for Basic Plan retirees”. The Member Investment Plan paragraph carries the fixed increase. For the other group the page says “you should not plan on a scheduled post-retirement increase.” Which plan you are in is a fact on your own member account.
The rules, one by one
Each row is a sentence from the Post-Retirement Increases page, in its own words.
| Rule | What the page says |
|---|---|
| When the first increase comes | “after you’re retired a full year, you’ll receive a fixed 3% increase in your monthly pension each October.” |
| Example of timing | “if your retirement effective date is Dec. 1, 2025, your first increase will be in October 2027.” |
| Compounding | “Your post-retirement increase doesn’t compound, but it does accumulate.” |
| What the increase is based on | “The increase is based on your initial pension amount after applying any early reduced or survivor option reduction.” |
| Equated options | “If you choose one of the equated options, the advance portion of your pension is not included when the 3% is calculated.” |
| 100% survivor option | “If you chose the 100% survivor option, your beneficiary would receive the same annual increase you received.” |
| 75% or 50% survivor option | “If you chose the 75% or 50% survivor option, your beneficiary would receive either 75% or 50% of the annual increase you received.” |
| Basic Plan retirees | “If you’re a Basic Plan retiree, you should not plan on a scheduled post-retirement increase.” |
| Wage adjustments | “If your school contract is under negotiation when you retire, you might have a wage adjustment after your pension begins.” |
The figures the page prints
The page prints its own example: “Molly retired Dec. 1, 2025, with a monthly pension payment of $1,200.” It continues “Beginning October 2027 (the first October after she’s been retired a full year) she’ll begin receiving an additional 3% of her initial pension, or $36 a month.”
The page then lists the first three payments: “The first October, Molly will receive $1,236 ($1,200 + $36).” “The next October, Molly will receive $1,272 ($1,200 + $36 + $36).” “The third October, Molly will receive $1,308 ($1,200 + $36 + $36 + 36).”
Check of the page’s arithmetic: 3% of $1,200 is $36. Adding three increases of $36 to $1,200 gives $1,308. The $36 stays the same every year because the page says the increase does not compound.
An illustration, not a page example
Here is a computation with an invented initial monthly pension of $1,500 after any early reduced or survivor option reduction. Using the page’s fixed 3% rule, the yearly increase is computed as $1,500 x 3% = $45. The monthly pension would be $1,545 after the first increase ($1,500 plus $45), $1,590 after the second ($1,545 plus $45) and $1,635 after the third ($1,590 plus $45). These numbers are invented to show the arithmetic. Your own award letter and benefit statement control your amount.
What to do and where to look
On what the retirement system tells you, the page says of the Basic Plan “You’ll be notified if a supplemental payment will be issued.”
The page ties wage corrections to the school’s report: “Once your school reports the correction, we’ll correct your final average compensation and pension amount.” “You’ll be paid all past due benefits.”
Related reading: single life versus joint and survivor pensions, whether Michigan taxes pensions and public pension retirement decisions.
Edition
This page reads Michigan Office of Retirement Services, Post-Retirement Increases (Public School Employees’ Retirement System), the current page the Michigan Office of Retirement Services served on 2026-10-21. Check the edition and your own tier or plan on your own member account; the official text controls over this summary.
Common mistakes
- Expecting the increase to grow on itself. The page says “Your post-retirement increase doesn’t compound, but it does accumulate.”
- Counting on an increase as a Basic Plan retiree. The page says “If you’re a Basic Plan retiree, you should not plan on a scheduled post-retirement increase.”
- Assuming a survivor option changes nothing after you die. The page says “If you chose the 100% survivor option, your beneficiary would receive the same annual increase you received.”
Related: Michigan MPSERS retirement decisions, single life versus joint and survivor pensions, whether Michigan taxes pensions, and public pension retirement decisions.
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Answer againSources
- Michigan Office of Retirement Services, Post-Retirement Increases (Public School Employees’ Retirement System): www.michigan.gov
- Related official page (not quoted): Michigan Office of Retirement Services, Public School Employees’ Retirement System: www.michigan.gov
Read from the Michigan Office of Retirement Services pages linked above on October 21, 2026. General information, not tax advice. Your own facts decide the outcome, and a pension system or a qualified professional is the right place to confirm anything consequential.