HB-4425, As Passed House, December 4, 2008

HOUSE BILL No. 4425

(As amended December 4, 2008)

March 8, 2007, Introduced by Reps. Pastor and Stahl and referred to the Committee on Judiciary.

A bill to amend 1992 PA 234, entitled

"The judges retirement act of 1992,"

(MCL 38.2101 to 38.2670) by adding section 513.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 513. (1) Effective January 1, [2009], the retirement

allowance payable to a retirant or beneficiary of a deceased

retirant under Tier 1 is supplemented by the amount determined

under subsection (2).

(2) On or before April 1 of each state fiscal year, the

retirement system shall determine the amount by which the actuarial

value of the assets in Tier 1 exceed the present value of expected

future benefit payments for Tier 1 beneficiaries. If the amount by

which the actuarial value of the assets in Tier 1 exceed the

present value of expected future benefit payments for Tier 1

House Bill No. 4425 as amended December 4, 2008

beneficiaries [and the present and future liabilities of active members,

vested terminated members, retirants, and retirement allowance beneficiaries] is an amount that will allow retirants and retirement

allowance beneficiaries to receive individual increases of $900.00

per year [and keep the actuarial value of the assets in Tier 1 at 120% of

the present value of expected future benefit payments], the retirement system shall grant an increase of $900.00

per year to each retirant and retirement allowance beneficiary

receiving retirement payments under this act. In any year in which

the actuarial value of assets exceeds the present value of expected

future benefit payments [and the present and future liabilities of active

members, vested terminated members, retirants, and retirement allowance

beneficiaries] by an amount [that would keep the actuarial value

of the assets in Tier 1 at 120% of the present value of expected future benefit payments and that would result in an increase of] less than the value of $900.00

per retirant, the increase shall be reduced on a pro rata basis to

reflect an amount less than $900.00 per retirant. [If an increase of any

amount would result in the actuarial value of the assets in Tier 1 being

less than 120% of the present value of expected future benefit payments,

no increase will be given for that year.]

(3) The percentage of final compensation limits of section 503

do not apply to the increase authorized by this section.

(4) The recalculated retirement allowance shall be the basis

on which future adjustments to the retirement allowance are

calculated.

(5) The supplement provided by this section shall be

calculated pursuant to subsection (2) and shall be paid annually.

For a retirant or beneficiary of a deceased retirant who is

eligible to receive a supplement under this section, who is

receiving a retirement allowance pursuant to service credited under

the former judges retirement system, and who is receiving a

retirement allowance pursuant to service credited under the former

probate judges retirement system. The retirement system, pursuant

to this section, shall only supplement the retirement allowance

that is the largest in amount. If a retirant dies before July 1,

[2009] and no benefits become payable under section 506 or 508, the