April 21, 2009, Introduced by Rep. Rick Jones and referred to the Committee on Labor.
A bill to amend 1943 PA 240, entitled
"State employees' retirement act,"
by amending sections 19 and 20 (MCL 38.19 and 38.20), as amended by
2002 PA 93.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 19. (1) A member who is 60 years of age or older and has
10 or more years of credited service or a member who is 60 years of
age or older and has 5 or more years of credited service as
provided in section 20(4) or (5) may retire upon written
application to the retirement board, stating a date on which he or
she desires to retire. Beginning on the retirement allowance
effective date, he or she shall receive a retirement allowance
computed according to section 20(1).
(2) A member who is 55 years of age or older, but less than 60
years of age, and has 15 or more years of credited service, may
retire upon written application to the retirement board stating a
date on which he or she desires to retire. Upon retirement he or
she shall receive a retirement allowance computed according to
section 20(1). Except as otherwise provided in this act, the
retirement allowance of a member who has less than 30 years of
credited service shall be reduced by an amount that is 0.5% of the
retirement allowance multiplied by the number of months the
person's age at retirement is under 60 years. The reduction of 1/2
of 1% for each month and fraction of a month from the member's
retirement allowance effective date to the date of the member's
sixtieth birthday provided for in this subsection does not apply to
a member who retired before July 1, 1974 and before attainment of
age 60, with 30 or more years of credited service. The retirement
allowance of a retirant or beneficiary of a retirant who retired
before that date shall be recalculated disregarding the reduction,
and the person receiving the retirement allowance is eligible to
receive an adjusted retirement allowance based on the recalculation
beginning October 1, 1987, but is not eligible to receive the
adjusted amount attributable to any month beginning before October
1, 1987. The recalculated retirement allowance provided by this
subsection shall be paid by January 1, 1988. The retirement
allowance of a retirant who dies before January 1, 1988, and who
has not nominated a retirement allowance beneficiary pursuant to
section 31, shall not be recalculated pursuant to this subsection.
(3) A member who is 50 years of age or older and has 30 or
more years of credited service may retire upon written application
to the retirement board stating a date on which he or she desires
to retire. Upon retirement, he or she shall receive a retirement
allowance computed according to section 20(1) without regard to the
reduction in subsection (2).
(4) (3)
Notwithstanding any other provision
of this section,
effective April 1, 1988, a member may retire with a retirement
allowance computed according to section 20(1), without regard to
the reduction in subsection (2), if all of the following apply:
(a) The member files a written application with the retirement
board stating a date, not less than 30 or more than 90 days after
the execution and filing of the application, on which the member
desires to retire, and which is within the early retirement
effective period.
(b) The member was employed by the state for the 6-month
period immediately preceding the member's retirement allowance
effective date. This subdivision does not apply to a member who had
been restored to active service during that 6-month period pursuant
to section 33.
(c) On the last day of the month immediately preceding the
retirement allowance effective date stated in the application, the
member's combined age and length of credited service is equal to or
greater than 80 years and the member is 50 years of age or older.
(d) For purposes of this subsection, "early retirement
effective period" means 1 of the following:
(i) Except as provided in subparagraph (ii), the period
beginning on April 1, 1988 and ending on April 1, 1989.
(ii) For a member employed by a hospital or facility owned or
operated by the department formerly known as the department of
mental health that is in the process of being closed by the
department formerly known as the department of mental health, the
period beginning on April 1, 1988 and ending on October 1, 1989.
(5) (4)
As used in subsections (5) (6) to (9) (10):
(a) "Agency of the department" means 1 of the following:
(i) Southwest Michigan community living services.
(ii) Wayne community living services.
(b) "Department inpatient facility" means 1 of the following:
(i) A developmental disability center that is directly operated
by the department formerly known as the department of mental health
for purposes of providing inpatient care and treatment services to
persons with developmental disabilities.
(ii) A psychiatric hospital that is directly operated by the
department formerly known as the department of mental health for
purposes of providing inpatient diagnostic and therapeutic services
to persons who are mentally ill.
(6) (5)
Notwithstanding any other provision
of this section, a
member who is an employee of an agency of the department or a
department inpatient facility and is on layoff status because the
agency or inpatient facility has been designated by the state
officer formerly known as the director of mental health for closure
on or after October 1, 1989, may retire as provided in subsection
(7)
(8) or (8) (9), as applicable, with a retirement allowance
computed according to section 20(1), without regard to the
reduction in subsection (2), upon satisfaction of any 1 of the
following conditions:
(a) The member is 51 years of age or older and has 25 or more
years of credited service, the last 5 of which are as an employee
of an agency of the department designated for closure or a
department inpatient facility designated for closure.
(b) The member is at least 56 years of age and has 10 or more
years of credited service, the last 5 of which are as an employee
of an agency of the department designated for closure or a
department inpatient facility designated for closure.
(c) The member has 25 or more years of credited service,
regardless of age, as an employee of an agency of the department
designated for closure or a department inpatient facility
designated for closure.
(7) (6)
When a department inpatient
facility or agency is
designated for closure on or after October 1, 1989, the state
officer formerly known as the director of mental health shall
certify in writing to the state legislature and the retirement
board, not less than 240 days before the designated official date
of closure, which facility or agency is to be closed and the
designated official date of closure.
(8) (7)
Except as provided in subsection (8)
(9), a member who
is
eligible to receive a retirement allowance under subsection (5)
(6) may retire effective on the date that an agency of the
department or a department inpatient facility designated for
closure
as provided in subsection (5) (6)
actually closes, upon
written application to the retirement board not less than 30 or
more than 180 days before the designated official date of closure.
Beginning on the retirement allowance effective date, he or she
shall receive a retirement allowance computed according to section
20(1).
(9) (8)
A member who is on layoff status,
is not working for
the state, and becomes eligible to receive a retirement allowance
under
subsection (5) (6) and who was an employee of an agency of
the department or a department inpatient facility that has been
designated
for closure as provided in subsection (5) (6) and that
actually closes on or after October 1, 1989, may retire upon
written application to the retirement board, stating a date upon
which he or she wishes to retire. Beginning on the retirement
allowance effective date, he or she shall receive a retirement
allowance computed according to section 20(1).
(10) (9)
Any additional accrued actuarial
cost and costs for
health insurance resulting from the implementation of subsection
(5)
(6) shall be funded from appropriations to the
department
formerly known as the department of mental health for this purpose.
(11) (10)
A member who is an employee of the
state accident
fund on the date of transfer to a permitted transferee as that term
is defined by section 701a of the worker's disability compensation
act of 1969, 1969 PA 317, MCL 418.701a, may retire if the member's
age and his or her length of service is equal to or greater than 70
years on the date of transfer. The member may retire upon written
application to the retirement board, stating a date, not less than
30 or more than 90 days after the execution and filing of the
application, on which he or she desires to retire. Beginning on the
retirement allowance effective date, he or she shall receive a
retirement allowance computed according to section 20(1) without
regard to the reduction required by subsection (2).
(12) (11)
A member who is an employee of the Michigan
biologic
products institute on the date the institute is conveyed pursuant
to the Michigan biologic products institute transfer act, 1996 PA
522, MCL 333.26331 to 333.26340, may retire if the member's age and
his or her length of service is equal to or greater than 70 years
on the date of the conveyance. The member may retire upon written
application to the retirement board, stating a date, not less than
30 or more than 90 days after the execution and filing of the
application, on which he or she desires to retire. Beginning on the
retirement allowance effective date, he or she shall receive a
retirement allowance computed according to section 20(1) without
regard to the reduction required by subsection (2).
(13) (12)
A member who is an employee of the
liquor control
commission created by section 209 of the Michigan liquor control
code
of 1998, 1998 PA 5 58, MCL 436.1209, whose employment is
terminated due to the privatization of the distribution of spirits
within this state is effectuated pursuant to the resolution and
order adopted by the liquor control commission on February 7, 1996,
a plan adopted pursuant to statute or court order, or a plan
adopted pursuant to both statute and order of the liquor control
commission may retire if the member's age and his or her length of
service is equal to or greater than 70 years on the date the
privatization is effectuated. The member may retire under this
subsection upon written application to the retirement board,
stating a date, not less than 30 or more than 90 days after the
execution and filing of the application, on which he or she desires
to retire. Beginning on the retirement allowance effective date, he
or she shall receive a retirement allowance computed according to
section 20(1), without regard to the reduction required by
subsection (2). The cost of benefits paid under this section shall
be paid out of the revolving fund created under section 221 of the
Michigan liquor control code of 1998, 1998 PA 58, MCL 436.1221.
Sec. 20. (1) Upon his or her retirement, as provided for in
section 19, 19a, 19b, 19c, or 19d, a member shall receive a
retirement allowance equal to the member's number of years and
fraction of a year of credited service multiplied by 1-1/2% of his
or her final average compensation. For a member who retires on or
after October 1, 2009, the member shall receive a retirement
allowance equal to the member's number of years and fraction of a
year of credited service multiplied by 1-3/4% of his or her final
average compensation. The member's retirement allowance is subject
to subsection (3). Upon his or her retirement, the member may elect
an option provided for in section 31(1).
(2) Pursuant to rules promulgated by the retirement board, a
member who retires before becoming 65 years of age may elect to
have his or her regular retirement allowance equated on an
actuarial basis to provide an increased retirement allowance
payable up to his or her attainment of 65 years of age and a
reduced retirement allowance payable after his or her attainment of
65 years of age. His or her increased retirement allowance payable
up to age 65 shall approximately equal the sum of his or her
reduced retirement allowance payable after age 65 and his or her
estimated social security primary insurance amount. In addition,
upon retirement the member may elect an option provided for in
section 31(1).
(3) If a retirant dies before receiving payment of his or her
retirement allowance in an aggregate amount equal to the retirant's
accumulated contributions credited to the retirant in the
employees' savings fund at the time of his or her retirement, the
difference between his or her accumulated contributions and the
amount of retirement allowance received by him or her shall be paid
to the person or persons that he or she nominated by written
designation executed and filed with the retirement board. If the
person or persons do not survive the retirant, then the difference,
if any, shall be paid to the retirant's legal representative or
estate. Benefits shall not be paid under this subsection on account
of the death of the retirant if he or she elected an option
provided for in section 31(1).
(4) If a member has 10 or more years of credited service, or
has 5 or more years of credited service as an elected officer or in
a position in the executive branch or the legislative branch
excepted or exempt from the classified state civil service as
provided in section 5 of article XI of the state constitution of
1963, and is separated from the service of the state for a reason
other than retirement or death, he or she shall remain a member
during the period of absence from the state service for the
exclusive purpose of receiving a retirement allowance provided for
in this section. If a former employee of the state accident fund
who had 5 or more years of service as an employee of the state
accident fund returns to employment with the state before receiving
a retirement allowance under this act, the employee shall be
required to accumulate 10 or more years of credited service before
receiving a retirement allowance under this act. If a former
employee of the Michigan biologic products institute who is
eligible to and has elected to purchase additional credited service
pursuant to section 17l(2) returns to employment with the state
before receiving a retirement allowance under this act, the
employee shall be required to accumulate 10 or more years of
credited service, without regard to the additional credited service
purchased pursuant to section 17l(2) but including any credited
service authorized under section 16, before receiving a retirement
allowance under this act. If the member withdraws all or part of
his or her accumulated contributions, he or she ceases to be a
member. Upon becoming 60 years of age or older, the member may
retire upon his or her written application to the retirement board
as provided in section 19(1). If a member elects an option as
provided under section 31(4), but dies before the effective date of
his or her retirement, the option elected by the member shall be
carried out, and the beneficiary of the member is entitled to all
advantages due under that option.
(5) A person who is a member after January 1, 1981, who has at
least 5 years of credited service, and whose employment with the
department formerly known as the department of mental health is
terminated by reason of reduction in force related to
deinstitutionalization that may or may not result in facility
closure, shall remain a member during the period of absence from
the state service for the exclusive purpose of receiving a service
retirement allowance as provided in this subsection. As used in
this subsection, "deinstitutionalization" means planned reduction
of state center or hospital beds through placement of individuals
from the hospital or facility, or through limiting admissions to
centers and hospitals, or both. If a member withdraws all or part
of the member's accumulated contributions, the member ceases to be
a member. Upon becoming 60 years of age or older, the member may
retire upon written application to the retirement board. The
application shall specify a date on which the member desires to
retire. Upon retirement, the member shall receive a retirement
allowance equal to the number of years and fraction of a year of
credited state service multiplied by 1-1/2% of the member's final
average compensation. Upon retirement, the member may elect an
option provided in section 31(1). If the member elects an option
provided for in section 31(4), but dies before the effective date
of retirement, the option elected by the member shall be carried
out, and a beneficiary of the member is entitled to all advantages
due under the option.
(6) A retirant or the beneficiary of a retirant who retired
before July 1, 1974 shall have his or her retirement allowance
recalculated based on the retirant's number of years and fraction
of a year of credited service multiplied by 1.5% of his or her
final average compensation. The retirant or beneficiary is eligible
to receive the recalculated retirement allowance beginning October
1, 1987, but is not eligible to receive the adjusted amount
attributable to any month beginning before October 1, 1987. The
recalculated retirement allowance provided by this subsection shall
be paid by January 1, 1988 and shall be the basis on which future
adjustments to the allowance, including the supplement provided by
section 20h, are calculated. The retirement allowance of a retirant
who dies before January 1, 1988, and who did not nominate a
retirement allowance beneficiary pursuant to section 31, shall not
be recalculated pursuant to this subsection.
(7) Each retirement allowance payable under this act shall
date from the first of the month following the month in which the
applicant satisfies the age and service or other requirements for
receiving the retirement allowance and terminates state service. A
full month's retirement allowance is payable for the month in which
a retirement allowance ceases.
(8) An employee of the state accident fund who has 5 or more
but less than 10 years of credited service as of the effective date
of the transfer authorized by section 701a of the worker's
disability compensation act of 1969, 1969 PA 317, MCL 418.701a, and
who is permitted to receive a retirement allowance under subsection
(4) is eligible for health care benefits under section 20d on the
date of his or her retirement to the same extent as a member with
10 years of credited service who vested on the same date.
(9) An employee of the Michigan biologic products institute
who has 5 or more but less than 10 years of credited service as of
the effective date of the conveyance authorized by the Michigan
biologic products institute transfer act and who is permitted to
receive a retirement allowance under subsection (4) is eligible for
health care benefits under section 20d on the date of his or her
retirement to the same extent as a member with 10 years of credited
service who vested on the same date.