HB-4593, As Passed House, June 12, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 4593

     A bill to amend 1980 PA 300, entitled

"The public school employees retirement act of 1979,"

by amending section 61 (MCL 38.1361), as amended by 2006 PA 158.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 61. (1) Except as otherwise provided in this section, if

a retirant is receiving a retirement allowance other than a

disability allowance payable under this act or under former 1945 PA

136, on account of either age or years of personal service

performed, or both, and becomes employed by a reporting unit, the

following shall take place:

     (a) The retirant shall not be entitled to a new final average

compensation or additional service credit under this retirement

system unless additional service is performed equivalent to 5 or

more years of service credit or, if the retirant has contributed to

the member investment plan, the equivalent of 3 or more years of

service credit. The retirant may elect to have the retirement

allowance recomputed based on the added credit or the final average

compensation resulting from the added service, or both. A

retirement allowance shall not be recomputed until the retirant

pays into the retirement system an amount equal to the retirant's

new final average compensation multiplied by the percentage

determined under section 41(2) for normal cost and unfunded

actuarial accrued liabilities, not including the percentage

required for the funding of health benefits, multiplied by the

total service credit in the period in which the retirant's

additional service was performed.

     (b) The retirant's retirement allowance shall be reduced by

the lesser of the amount that the earnings in a calendar year

exceed the amount permitted without a reduction of benefits under

the social security act, chapter 531, 49 Stat. 620, or 1/3 of the

retirant's final average compensation. For purposes of computing

allowable earnings under this subdivision, the final average

compensation shall be increased by 5% for each full year of

retirement.

     (2) The retirement system may offset retirement benefits

payable under this act against amounts owed to the retirement

system by a retirant or retirement allowance beneficiary.

     (3) Subsection (1) does not apply to a retirant if all of the

following circumstances exist:

     (a) The retirant is a former teacher or administrator employed

in a teaching or research capacity by a university that is

considered a reporting unit for the limited purpose described in

section 7(3).

     (b) The retirant is not eligible to use any service or

compensation attributable to the employment described in

subdivision (a) for a recomputation of his or her retirement

allowance.

     (c) A university that employs a retirant pursuant to this

subsection shall report such employment to the retirement system by

July 1 of each year. The report to be filed shall include the name

of the retirant, the capacity in which the retirant is employed,

and the total annual compensation paid to the retirant.

     (4) Until July 1, 2011, subsection Subsection (1) does not

apply to a retirant if all of the following circumstances exist:

     (a) The retirant is employed by a reporting unit that has an

approved emergency situation, not including a situation caused by a

labor dispute, that necessitates the hiring of a retirant in the

capacity of a teacher, principal, stationary engineer,

administrator, or other category as determined by the

superintendent of public instruction to prevent depriving students

of an education. The chief executive officer or superintendent of

the school district shall, on an annual basis, include with the

written notification documentation showing that more than 8% of all

classes in the district during the 1998-99 2007-2008 school year

are taught by full-time substitute teachers who are not

certificated in the subjects or grade levels which they teach. The

chief executive officer or superintendent of the school district

shall on an annual basis include with the written notification

documentation that the district has posted the position with

colleges, universities, and other recruiting placement sources and

has been unable to employ a qualified person for each position.

Within 30 days after receipt of the notification and documentation

under this subdivision, the department of education shall notify

the chief executive officer or superintendent and the retirement

system of its approval or disapproval of the emergency situation.

If disapproved by the department of education, this subsection does

not apply.

     (b) The retirant is employed under an emergency situation

described in subdivision (a) for a period not to exceed 6 8 years.

     (c) The retirant is not eligible to use any service or

compensation attributable to the employment described in

subdivision (a) for a recomputation of his or her retirement

allowance.

     (d) If the reporting unit employs a retirant under this

subsection for at least 3 and less than 4 years, the reporting unit

shall pay to the retirement system an amount equal to 50% of the

contribution rate for health benefits provided under section 91

that is identified in section 41 to the retirement system for each

retirant who becomes employed by a reporting unit under this

section. If the retirant is employed for 4 years or more, the

reporting unit shall pay 100% of the contribution rate for health

benefits provided under section 91 that is identified in section 41

to the retirement system for each retirant who becomes employed by

a reporting unit under this subsection.

     (5) On or before July 1, 1999, the state superintendent of

public instruction shall compile a listing of critical shortage

disciplines. This listing shall be updated annually.

     (6) Until July 1, 2011, subsection (1) does not apply to a

retirant if all of the following circumstances exist:

     (a) The retirant is employed by a reporting unit that has a

situation, not including a situation caused by a labor dispute,

that necessitates the hiring of a retirant in an area that has been

identified by the state superintendent of public instruction as a

critical shortage discipline pursuant to subsection (5).

     (b) The retirant is employed under a situation described in

subdivision (a) for a period not to exceed 6 8 years.

     (c) The retirant is not eligible to use any service or

compensation attributable to the employment described in

subdivision (a) for a recomputation of his or her retirement

allowance.

     (d) If the reporting unit employs a retirant under this

subsection for at least 3 and less than 4 years, the reporting unit

shall pay to the retirement system an amount equal to 50% of the

contribution rate for health benefits provided under section 91

that is identified in section 41 to the retirement system for each

retirant who becomes employed by a reporting unit under this

section. If the retirant is employed for 4 years or more, the

reporting unit shall pay 100% of the contribution rate for health

benefits provided under section 91 that is identified in section 41

to the retirement system for each retirant who becomes employed by

a reporting unit under this subsection.

     (e) The chief executive officer or superintendent of the

school district shall provide written notification to the

superintendent of public instruction that includes documentation

that the district has posted the position with colleges,

universities, and other recruiting placement sources and has been

unable to employ a qualified person for the vacancy. Each notice

shall be approved or disapproved by the state board of education,

which shall notify the chief executive officer or superintendent of

the district and the retirement system of its decision.

     (7) The provisions of subsections (4) and (6) shall only apply

for retirants who have been retired for at least 12 months before

becoming employed under this section.

     (8) A reporting unit that employs a retirant who qualifies

under subsection (4) or (6) shall report the employment to the

retirement system within 30 days of employment. The report shall

include the name of the retirant, the capacity in which the

retirant is employed, and the total compensation paid to the

retirant by the reporting unit, or the compensation paid to the

retirant through a contractual arrangement.

     (9) As used in this section, "becomes employed by a reporting

unit" or "hired" means directly hired by a reporting unit, hired as

an independent contractor by a reporting unit, or indirectly hired

by a reporting unit through a contractual arrangement with third

parties, to fill a vacant or created position for the reporting

unit through a contractual arrangement. A retirant who is an

employee of a company that does business with a reporting unit but

who is not replacing a vacant or filling a created position with

the reporting unit or working full-time at the reporting unit in

fulfilling his or her duties with the company that does business

with the reporting unit is not employed by a reporting unit.