HOUSE BILL No. 6265 November 5, 1998, Introduced by Rep. Varga and referred to the Committee on Regulatory Affairs. A bill to amend 1943 PA 240, entitled "State employees' retirement act," by amending sections 17l and 19 (MCL 38.17l and 38.19), section 17l as amended by 1996 PA 521 and section 19 as amended by 1998 PA 205. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 17l. (1) An employee of the state accident fund who 2 has 5 or more but less than 10 years of credited service as of 3 the effective date of the transfer in order to qualify for a 4 retirement allowance under this act may purchase additional serv- 5 ice credit under this subsection. A member who purchases addi- 6 tional service credit shall contribute within 10 years after the 7 effective date of the transfer an amount equal to the product of 8 the following: 06130'98 c LBO 2 1 (a) Ten less the number of years and fraction of a year of 2 that employee's credited service. 3 (b) The employee's full-time or equated full-time fiscal 4 year compensation for the last fiscal year before the effective 5 date of the transfer. 6 (c) The actuarial cost percentage determined under section 7 1a for the year in which the effective date of the transfer 8 occurred. 9 (2) In order to qualify for a retirement allowance under 10 this act, an employee of the Michigan biologic products institute 11 who has 5 or more but less than 10 years of credited service as 12 of the effective date of the conveyance of the Michigan biologic 13 products institute under the Michigan biologic products institute 14 transfer act may purchase additional service credit under this 15 subsection. A member who elects within 1 year after the effec- 16 tive date of the conveyance to purchase additional service credit 17 under this subsection shall contribute within 11 years after the 18 effective date of the conveyance an amount equal to the product 19 of the following: 20 (a) Ten less the number of years and fraction of a year of 21 that employee's credit service. 22 (b) The employee's full-time or equated full-time fiscal 23 year compensation for the last fiscal year before the effective 24 date of the conveyance. 25 (c) The actuarial cost percentage determined under 26 section 1a(2) for the year which is 1 year after the year in 27 which the effective date of the conveyance occurred. 06130'98 c 3 1 (3) Subsection (2) applies only to members who were 2 employees of the Michigan biologic products institute as of the 3 effective date of the conveyance and who maintain employment with 4 the transferee for not less than 1 year unless the employee is 5 laid off by the new employer for reasons other than good cause. 6 (4) An employee of the liquor control commission created by 7 section5 of the Michigan liquor control act, Act No. 8 of the8Public Acts of the Extra Session of 1933, being section 436.5 of9the Michigan Compiled Laws209 OF THE MICHIGAN LIQUOR CONTROL 10 CODE OF 1998, 1998 PA 58, MCL 436.1209, whose employment is ter- 11 minated due to the privatization of the distribution of spirits 12 within this state pursuant to the resolution and order adopted by 13 the liquor control commission on February 7, 1996, a plan adopted 14 pursuant to statute or court order, or a plan adopted pursuant to 15 both statute and order of the liquor control commission and who 16 has 5 or more but less than 10 years of credited service on the 17 date the privatization is effectuated in order to qualify for a 18 retirement allowance under this act may purchase additional serv- 19 ice credit under this subsection. The cost of benefits paid 20 under this section shall be paid out of the revolving fund cre- 21 ated under section10 of Act No. 8 of the Public Acts of the22Extra Session of 1933, being section 436.10 of the Michigan23Compiled Laws221 OF THE MICHIGAN LIQUOR CONTROL CODE OF 1998, 24 1998 PA 58, MCL 436.1221. A member who elects within 1 year to 25 purchase additional service credit under this subsection shall 26 contribute within 6 years after the privatization date or the 06130'98 c 4 1 date of separation from state employment, whichever occurs first, 2 an amount equal to the product of the following: 3 (a) Ten less the number of years and fraction of a year of 4 that employee's credited service. 5 (b) The employee's full-time or equated full-time fiscal 6 year compensation for the last fiscal year before the privatiza- 7 tion date. 8 (c) The actuarial cost for the year in which the privatiza- 9 tion date occurred. 10 (5) Not more than 5 years of additional service credit may 11 be purchased under this section. 12 Sec. 19. (1) A member who is 60 years of age or older and 13 has 10 or more years of credited service or a member who is 60 14 years of age or older and has 5 or more years of credited service 15 as provided in section 20(4) or (5) may retire upon written 16 application to the retirement board, stating a date, not less 17 than 30 or more than 90 days after the execution and filing of 18 the application, on which he or she desires to retire. Beginning 19 on the retirement allowance effective date, he or she shall 20 receive a retirement allowance computed according to section 21 20(1). 22 (2) A member who is 55 years of age or older, but less than 23 60 years of age, and has 15 or more years of credited service, 24 may retire upon written application to the retirement board stat- 25 ing a date, not less than 30 or more than 90 days after the exe- 26 cution and filing of the application, on which he or she desires 27 to retire. Upon retirement he or she shall receive a retirement 06130'98 c 5 1 allowance computed according to section 20(1). Except as 2 otherwise provided in this act, the retirement allowance of a 3 member who has less than 30 years of credited service shall be 4 reduced by an amount that is 0.5% of the retirement allowance 5 multiplied by the number of months the person's age at retirement 6 is under 60 years. The reduction of 1/2 of 1% for each month and 7 fraction of a month from the member's retirement allowance effec- 8 tive date to the date of the member's sixtieth birthday provided 9 for in this subsection does not apply to a member who retired 10 before July 1, 1974 and before attainment of age 60, with 30 or 11 more years of credited service. The retirement allowance of a 12 retirant or beneficiary of a retirant who retired before that 13 date shall be recalculated disregarding the reduction, and the 14 person receiving the retirement allowance is eligible to receive 15 an adjusted retirement allowance based on the recalculation 16 beginning October 1, 1987, but is not eligible to receive the 17 adjusted amount attributable to any month beginning before 18 October 1, 1987. The recalculated retirement allowance provided 19 by this subsection shall be paid by January 1, 1988. The retire- 20 ment allowance of a retirant who dies before January 1, 1988, and 21 who has not nominated a retirement allowance beneficiary pursuant 22 to section 31, shall not be recalculated pursuant to this 23 subsection. 24 (3) Notwithstanding any other provision of this section, 25 effective April 1, 1988, a member may retire with a retirement 26 allowance computed according to section 20(1), without regard to 27 the reduction in subsection (2), if all of the following apply: 06130'98 c 6 1 (a) The member files a written application with the 2 retirement board stating a date, not less than 30 or more than 90 3 days after the execution and filing of the application, on which 4 the member desires to retire, and which is within the early 5 retirement effective period. 6 (b) The member was employed by the state for the 6-month 7 period immediately preceding the member's retirement allowance 8 effective date. This subdivision does not apply to a member who 9 had been restored to active service during that 6-month period 10 pursuant to section 33. 11 (c) On the last day of the month immediately preceding the 12 retirement allowance effective date stated in the application, 13 the member's combined age and length of credited service is equal 14 to or greater than 80 years and the member is 50 years of age or 15 older. 16 (d) For purposes of this subsection, "early retirement 17 effective period" means 1 of the following: 18 (i) Except as provided in subparagraph (ii), the period 19 beginning on April 1, 1988 and ending on April 1, 1989. 20 (ii) For a member employed by a hospital or facility owned 21 or operated by the department formerly known as the department of 22 mental health that is in the process of being closed by the 23 department formerly known as the department of mental health, the 24 period beginning on April 1, 1988 and ending on October 1, 1989. 25 (4) As used in subsections (5) to (9): 26 (a) "Agency of the department" means 1 of the following: 06130'98 c 7 1 (i) Southwest Michigan community living services. 2 (ii) Wayne community living services. 3 (b) "Department inpatient facility" means 1 of the 4 following: 5 (i) A developmental disability center that is directly oper- 6 ated by the department formerly known as the department of mental 7 health for purposes of providing inpatient care and treatment 8 services to persons with developmental disabilities. 9 (ii) A psychiatric hospital that is directly operated by the 10 department formerly known as the department of mental health for 11 purposes of providing inpatient diagnostic and therapeutic serv- 12 ices to persons who are mentally ill. 13 (5) Notwithstanding any other provision of this section, a 14 member who is an employee of an agency of the department or a 15 department inpatient facility and is on layoff status because the 16 agency or inpatient facility has been designated by the state 17 officer formerly known as the director of mental health for clo- 18 sure on or after October 1, 1989, may retire as provided in sub- 19 section (7) or (8), as applicable, with a retirement allowance 20 computed according to section 20(1), without regard to the reduc- 21 tion in subsection (2), upon satisfaction of any 1 of the follow- 22 ing conditions: 23 (a) The member is 51 years of age or older and has 25 or 24 more years of credited service, the last 5 of which are as an 25 employee of an agency of the department designated for closure or 26 a department inpatient facility designated for closure. 06130'98 c 8 1 (b) The member is at least 56 years of age and has 10 or 2 more years of credited service, the last 5 of which are as an 3 employee of an agency of the department designated for closure or 4 a department inpatient facility designated for closure. 5 (c) The member has 25 or more years of credited service, 6 regardless of age, as an employee of an agency of the department 7 designated for closure or a department inpatient facility desig- 8 nated for closure. 9 (6) When a department inpatient facility or agency is desig- 10 nated for closure on or after October 1, 1989, the state officer 11 formerly known as the director of mental health shall certify in 12 writing to the state legislature and the retirement board, not 13 less than 240 days before the designated official date of clo- 14 sure, which facility or agency is to be closed and the designated 15 official date of closure. 16 (7) Except as provided in subsection (8), a member who is 17 eligible to receive a retirement allowance under subsection (5) 18 may retire effective on the date that an agency of the department 19 or a department inpatient facility designated for closure as pro- 20 vided in subsection (5) actually closes, upon written application 21 to the retirement board not less than 30 or more than 180 days 22 before the designated official date of closure. Beginning on the 23 retirement allowance effective date, he or she shall receive a 24 retirement allowance computed according to section 20(1). 25 (8) A member who is on layoff status, is not working for the 26 state, and becomes eligible to receive a retirement allowance 27 under subsection (5) and who was an employee of an agency of the 06130'98 c 9 1 department or a department inpatient facility that has been 2 designated for closure as provided in subsection (5) and that 3 actually closes on or after October 1, 1989, may retire upon 4 written application to the retirement board, stating a date, not 5 less than 30 or more than 180 days after the facility actually 6 closes, upon which he or she wishes to retire. Beginning on the 7 retirement allowance effective date, he or she shall receive a 8 retirement allowance computed according to section 20(1). 9 (9) Any additional accrued actuarial cost and costs for 10 health insurance resulting from the implementation of subsection 11 (5) shall be funded from appropriations to the department 12 formerly known as the department of mental health for this 13 purpose. 14 (10) A member who is an employee of the state accident fund 15 on the date of transfer to a permitted transferee as that term is 16 defined by section 701a of the worker's disability compensation 17 act of 1969, 1969 PA 317, MCL 418.701a, may retire if the 18 member's age and his or her length of service is equal to or 19 greater than 70 years on the date of transfer. The member may 20 retire upon written application to the retirement board, stating 21 a date, not less than 30 or more than 90 days after the execution 22 and filing of the application, on which he or she desires to 23 retire. Beginning on the retirement allowance effective date, he 24 or she shall receive a retirement allowance computed according to 25 section 20(1) without regard to the reduction required by subsec- 26 tion (2). 06130'98 c 10 1 (11) A member who is an employee of the Michigan biologic 2 products institute on the date the institute is conveyed pursuant 3 to the Michigan biologic products institute transfer act, 1996 PA 4 522, MCL 333.26331 to 333.26340, may retire if the member's age 5 and his or her length of service is equal to or greater than 70 6 years on the date of the conveyance. The member may retire upon 7 written application to the retirement board, stating a date, not 8 less than 30 or more than 90 days after the execution and filing 9 of the application, on which he or she desires to retire. 10 Beginning on the retirement allowance effective date, he or she 11 shall receive a retirement allowance computed according to 12 section 20(1) without regard to the reduction required by 13 subsection (2). 14 (12) A member who is an employee of the liquor control com- 15 mission created by section5 of the Michigan liquor control16act, 1933 (Ex Sess) PA 8, MCL 436.5209 OF THE MICHIGAN LIQUOR 17 CONTROL CODE OF 1998, 1998 PA 58, MCL 436.1209, whose employment 18 is terminated due to the privatization of the distribution of 19 spirits within this state is effectuated pursuant to the resolu- 20 tion and order adopted by the liquor control commission on 21 February 7, 1996, a plan adopted pursuant to statute or court 22 order, or a plan adopted pursuant to both statute and order of 23 the liquor control commission may retire if the member's age and 24 his or her length of service is equal to or greater than 70 years 25 on the date the privatization is effectuated. The member may 26 retire under this subsection upon written application to the 27 retirement board, stating a date, not less than 30 or more than 06130'98 c 11 1 90 days after the execution and filing of the application, on 2 which he or she desires to retire. Beginning on the retirement 3 allowance effective date, he or she shall receive a retirement 4 allowance computed according to section 20(1), without regard to 5 the reduction required by subsection (2). The cost of benefits 6 paid under this section shall be paid out of the revolving fund 7 created under section10 of the Michigan liquor control act,81933 (Ex Sess) PA 8, MCL 436.10221 OF THE MICHIGAN LIQUOR CON- 9 TROL CODE OF 1998, 1998 PA 58, MCL 436.1221. 06130'98 c Final page. LBO