October 20, 2016, Introduced by Senators HERTEL, HOOD, BRANDENBURG and GREGORY and referred to the Committee on Appropriations.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending sections 85, 91, and 108 (MCL 38.1385, 38.1391, and
38.1408), section 85 as amended by 2006 PA 617 and sections 91 and
108 as amended by 2012 PA 300.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 85. (1) A retiring member or retiring deferred member who
meets the requirements of section 81 or 81a or a member whom the
retirement board finds to be totally and permanently disabled and
eligible to receive a retirement allowance under section 86 or 87
shall elect to receive his or her retirement allowance under 1 of
the
payment options provided in this subsection. The election shall
must be in writing and filed with the retirement board at least 15
days before the effective date of the retirement allowance except
as provided for a disability retirant under section 86 or 87. The
amount of retirement allowance under subdivision (b), (c), or (d)
shall
must be the actuarial equivalent of the amount of
retirement
allowance under subdivision (a). The options are as follows:
(a)
A retirant shall will be paid a straight retirement
allowance
for life computed pursuant to under
section 84. An
additional
retirement allowance payment shall must not be made upon
on the retirant's death.
(b)
A retirant shall will be paid a reduced retirement
allowance
for life with the provision that upon on the retirant's
death, payment of the reduced retirement allowance is continued
throughout the lifetime of the retirement allowance beneficiary
whom the member or deferred member designates in a writing filed
with the retirement board at the time of election of this option. A
member or deferred member may elect this option and designate a
retirement allowance beneficiary under the conditions set forth in
section 82(2) or 89(3).
(c)
A retirant shall will be paid a reduced retirement
allowance
for life with the provision that upon on the retirant's
death, payment of 1/2 of the reduced retirement allowance is
continued throughout the lifetime of the retirement allowance
beneficiary whom the member designated in a writing filed with the
retirement board at the time of election of the option.
(d)
On and after January 1, 2000, After
December 31, 1999, a
retirant
shall will be paid a reduced retirement allowance for life
with
the provision that upon on
the retirant's death, payment of
75% of the reduced retirement allowance is continued throughout the
lifetime of the retirement allowance beneficiary whom the member
designated in a writing filed with the retirement board at the time
of election of the option.
(2) In addition to the election under subsection (1), a
retirant, other than a disability retirant who is 60 years of age
or less, may elect to coordinate his or her retirement allowance
with an estimated primary social security benefit. The retirant
shall
must be paid an increased retirement allowance until 62
years
of age and a reduced retirement allowance after 62 years of age.
The
increased retirement allowance paid until 62 years of age shall
must approximate the sum of the reduced retirement allowance
payable after 62 years of age and the retirant's estimated social
security primary insurance amount. The retirement system shall
determine the estimated social security primary insurance amount.
shall
be determined by the retirement system. The election under
this
subsection shall must be made at the same time and in the same
manner as required under subsection (1).
(3) Except as otherwise provided in this section, the election
of
a payment option in subsections (1) and (2) shall must not
be
changed on or after the effective date of the retirement allowance.
Except as provided in this section, the retirement allowance
beneficiary
selected under subsection (1)(b), (c), or (d) shall
must not be changed on or after the effective date of the
retirement
allowance and shall must be either a spouse, brother,
sister, parent, or child, including an adopted child, of the
member, deferred member, retiring member, or retiring deferred
member entitled to make the election under this act. Another
retirement
allowance beneficiary shall must
not be selected. If a
member, deferred member, retiring member, or retiring deferred
member is married at the retirement allowance effective date, an
election under subsection (1), other than an election under
subsection (1)(b), (c), or (d) naming the spouse as retirement
allowance
beneficiary, shall is not be effective unless the
election is signed by the spouse, except that this requirement may
be waived by the board if the signature of a spouse cannot be
obtained because of extenuating circumstances. For purposes of this
subsection,
"spouse" means the person individual to whom the
member, deferred member, retiring member, or retiring deferred
member
is married at on the retirement allowance effective date.
Payment
to a retirement allowance beneficiary shall must start
the
first
day of the month following after
the retirant's death.
(4) Except as otherwise provided in subsection (8), if the
retirement allowance beneficiary selected under subsection (1)(b),
(c),
or (d) predeceases the retirant, the retirant's benefit shall
must revert to a straight retirement allowance including post-
retirement
adjustments, if any, shall be is
effective the first of
the
month following after the death, and shall must be
paid during
the remainder of the retirant's life. This subsection applies to a
retirant whose effective date of retirement is after June 28, 1976,
but
the straight retirement allowance shall must not be payable for
any month beginning before the later of the retirement allowance
beneficiary's death or October 31, 1980. This subsection also
applies
to a retirant whose effective date of retirement was on or
before
June 28, 29, 1976, but the straight retirement allowance
shall
must not be payable for any month beginning before the
later
of the retirement allowance beneficiary's death or January 1, 1986.
A retirant who on January 1, 1986 is receiving a reduced retirement
allowance because the retirant designated a retirement allowance
beneficiary and the retirement allowance beneficiary predeceased
the retirant is eligible to receive the straight retirement
allowance beginning January 1, 1986, but the straight retirement
allowance
shall is not be payable for any month beginning before
January 1, 1986.
(5)
A retirant who returns to service pursuant to under
section 61 and whose retirement allowance beneficiary selected
under subsection (1)(b), (c), or (d) predeceases the member before
he or she again becomes a retirant may again choose a retirement
allowance
beneficiary pursuant to under
subsection (1)(b), (c), or
(d).
(6) If a retirant receiving a reduced retirement allowance
under subsection (1)(b), (c), or (d) is divorced from the spouse
who had been designated as the retirant's retirement allowance
beneficiary under subsection (1)(b), (c), or (d), the retirement
system shall consider the election of a reduced retirement
allowance
payment option shall be considered void by the retirement
system
if the judgment of divorce or award
or order of the court,
or an amended judgment of divorce or award or order of the court,
described in the public employee retirement benefit protection act,
2002 PA 100, MCL 38.1681 to 38.1689, and dated after June 27, 1991
provides that the election of a reduced retirement allowance
payment option under subsection (1)(b), (c), or (d) is to be
considered void by the retirement system and the retirant provides
a certified copy of the judgment of divorce or award or order of
the court, or an amended judgment of divorce or award or order of
the court, to the retirement system. If the retirement system
considers the election of a reduced retirement allowance payment
option
under subsection (1)(b), (c), or (d) is considered void by
the
retirement system under this
subsection, the retirant's
retirement
allowance shall must revert to a straight retirement
allowance, including postretirement adjustments, if any, subject to
an award or order of the court as described in the public employee
retirement benefit protection act, 2002 PA 100, MCL 38.1681 to
38.1689.
The retirement allowance shall must
revert to a straight
retirement allowance under this subsection effective the first of
the month after the date the retirement system receives a certified
copy of the judgment of divorce or award or order of the court.
This subsection does not supersede a judgment of divorce or award
or order of the court in effect on June 27, 1991. This subsection
does not require the retirement system to distribute or pay
retirement assets on behalf of a retirant in an amount that exceeds
the actuarially determined amount that would otherwise become
payable if a judgment of divorce had not been rendered.
(7) If the retirement allowance payments terminate before an
aggregate amount equal to the retirant's accumulated contributions
has been paid, the difference between the retirant's accumulated
contributions and the aggregate amount of retirement allowance
payments
made shall must be paid to the person individual
designated in a writing filed with the retirement board on a form
provided
by the retirement board. If the designated person
individual does not survive the retirant or retirement allowance
beneficiary, the difference shall be paid to the deceased
recipient's estate or to the legal representative of the deceased
recipient.
(8) A retirant who selected a retirement allowance beneficiary
under subsection (1)(b), (c), or (d) may change his or her
retirement
allowance beneficiary if all 1
or more of the following
apply:requirements are satisfied:
(a)
The first retirement allowance beneficiary is a spouse.The
retirant was married on his or her retirement allowance effective
date and all of the following apply:
(i) (b)
The first retirement allowance
beneficiary predeceases
the retirant after the retirement allowance effective date.
(ii) (c)
The retirant marries another spouse
after the
retirement allowance effective date.
(iii) (d)
The retirant files a written
request with the
retirement system to name his or her current spouse as a retirement
allowance beneficiary not earlier than 180 days and not later than
1 year after the marriage of the retirant and the current spouse
except that a retirant whose first retirement allowance beneficiary
predeceases the retirant after the retirement allowance effective
date
and before the effective date of the amendatory act that added
this
subsection shall have January
1, 2009 has 180 days from the
effective
date of the amendatory act that added this subsection
after January 1, 2009 to file a written request with the retirement
system.
(b) The retirant was married on the effective date of his or
her retirement but his or her marriage was not recognized by this
state and all of the following apply:
(i) The retirant continues to be married to the same spouse to
whom he or she was married on the effective date of retirement and
whose marriage is currently recognized by this state.
(ii) The retirant files a written request with the retirement
system to name his or her current spouse as a retirement allowance
beneficiary not earlier than 180 days and not later than 1 year
after the date of marriage of the retirant and the current spouse.
However, a retirant whose date of marriage is after the retirement
allowance effective date and before the effective date of the 2016
amendatory act that amended this section has 180 days after the
effective date of the 2016 amendatory act that amended this section
to file a written request with the retirement system.
(c) The retirant was not married on his or her retirement
allowance effective date and all of the following apply:
(i) The retirant marries after the retirement allowance
effective date.
(ii) The retirement allowance beneficiary is the retirant's
spouse.
(iii) The retirant files a written request with the retirement
system to name his or her current spouse as a retirement allowance
beneficiary not earlier than 180 days and not later than 1 year
after the date of marriage of the retirant and the current spouse.
However, a retirant whose date of marriage is after the retirement
allowance effective date and before the effective date of the 2016
amendatory act that amended this section has 180 days after the
effective date of the 2016 amendatory act that amended this section
to file a written request with the retirement system.
(9) A retirant who was not married on his or her retirement
allowance effective date and who did not select a payment option
provided in this section may select an optional form of benefit
payment under subsection (1)(b), (c), or (d) and designate a
retirement allowance beneficiary if all of the following apply:
(a) The retirant marries after his or her retirement allowance
effective date.
(b) The retirement allowance beneficiary is the retirant's
spouse.
(c)
The retirement allowance beneficiary is only designated as
the
retirement allowance beneficiary for that portion of the
retirant's
retirement allowance that is not subject to an eligible
domestic
relations order assigning a previous spouse a reduced
benefit
under section 4(b) of the eligible domestic relations order
act,
1991 PA 46, MCL 38.1704.
(c) (d)
The retirant files a written
request with the
retirement system to select the optional form of benefit payment
under subsection (1)(b), (c), or (d) and to designate his or her
spouse as the retirement allowance beneficiary, not earlier than
180 days and not later than 1 year after the retirant's marriage
except
that a retirant who marries whose
date of marriage is after
the
retirement allowance effective date and before the effective
date
of the amendatory act that added this subsection shall have
January
1, 2009 has 180 days from the
effective date of the
amendatory
act that added this subsection after
January 1, 2009 to
file a written request with the retirement system.
(10) The retirement allowance of the retirant who makes an
election
under subsection (8) or (9) shall must not be greater than
the actuarial equivalent of the retirement allowance as determined
by the retirement board that the retirant would otherwise be
entitled
to under subsection (1)(a) and shall must become effective
the
first day of the month following after the filing of the
written request with the retirement system.
(11) If the retirant dies no later than 12 months after the
effective date of his or her election under subsection (8) or (9),
the retirement allowance for the surviving spouse established under
subsection
(8) or (9) shall must terminate 12 months after the
death of the retirant.
(12) As used in this section, "date of marriage" means the
date that a marriage is recognized by this state.
Sec. 91. (1) Except as otherwise provided in this section, the
retirement system shall pay the entire monthly premium or
membership or subscription fee for hospital, medical-surgical, and
sick care benefits for the benefit of a retirant or retirement
allowance beneficiary who elects coverage in the plan authorized by
the retirement board and the department. Except as otherwise
provided in this section, beginning January 1, 2013, the retirement
system shall pay 80% of the entire monthly premium or membership or
subscription fee for hospital, medical-surgical, and sick care
benefits for the benefit of a retirant or retirement allowance
beneficiary who elects coverage in the plan authorized by the
retirement board and the department. Except as otherwise provided
in subsections (7) to (15), for a retirant or retirement allowance
beneficiary who is enrolled in the hospital, medical-surgical, and
sick care benefits plan on January 1, 2013 and who is eligible for
medicare
Medicare on that date, the retirement system shall pay 90%
of the entire monthly premium or membership or subscription fee for
hospital, medical-surgical, and sick care benefits for the benefit
of a retirant or retirement allowance beneficiary who elects
coverage in the plan authorized by the retirement board and the
department. Except as otherwise provided in subsection (8), this
subsection does not apply to a retirant who first becomes a member
after June 30, 2008.
(2) The retirement system may pay up to the maximum of the
amount payable under subsection (1) toward the monthly premium for
hospital, medical-surgical, and sick care benefits for the benefit
of a retirant or retirement allowance beneficiary enrolled in a
group health insurance or prepaid service plan not authorized by
the retirement board and the department, if enrolled before June 1,
1975, for whom the retirement system on July 18, 1983 was making a
payment towards his or her monthly premium.
(3) A retirant or retirement allowance beneficiary receiving
hospital, medical-surgical, and sick care benefits coverage under
subsection
(1) or (2), until eligible for medicare, shall Medicare,
must
have an amount equal to the cost
chargeable to a medicare
Medicare
recipient for part B of medicare Medicare deducted
from
his or her retirement allowance.
(4) Until December 31, 2012, the retirement system shall pay
90% of the monthly premium or membership or subscription fee for
dental and vision benefits for the benefit of a retirant or
retirement allowance beneficiary who elects coverage in the plan
authorized by the retirement board and the department. Except as
otherwise provided in this section, beginning January 1, 2013, the
retirement system shall pay 80% of the monthly premium or
membership or subscription fee for dental and vision benefits for
the benefit of a retirant or retirement allowance beneficiary who
elects coverage in the plan authorized by the retirement board and
the department. Except as otherwise provided in subsections (7) to
(15), for a retirant or retirement allowance beneficiary who is
enrolled in the dental and vision plan on January 1, 2013 and who
is 65 years of age or older on that date, the retirement system
shall pay 90% of the entire monthly premium or membership or
subscription fee for dental and vision benefits for the benefit of
a retirant or retirement allowance beneficiary who elects coverage
in the plan authorized by the retirement board and the department.
Payments
shall must begin under this subsection upon on approval
by
the retirement board and the department of plan coverage and a plan
provider. Except as otherwise provided in subsection (8), this
subsection does not apply to a retirant who first becomes a member
after June 30, 2008.
(5) Until December 31, 2012, the retirement system shall pay
up to 90% of the maximum of the amount payable under subsection (1)
toward the monthly premium or membership or subscription fee for
hospital, medical-surgical, and sick care benefits coverage
described in subsections (1) and (2) for each health insurance
dependent of a retirant receiving benefits under subsection (1) or
(2).
Until December 31, 2012, payment shall must not exceed 90% of
the actual monthly premium or membership or subscription fee.
Except
as otherwise provided in subsections (7) through to (15),
for a health insurance dependent who is enrolled in the hospital,
medical-surgical, and sick care benefit plan on January 1, 2013 and
who is eligible for medicare on that date, the retirement system
shall pay 90% of the entire monthly premium or membership or
subscription fee for hospital, medical-surgical, and sick care
benefits for the benefit of each health insurance dependent of a
retirant receiving benefits under subsection (1) or (2). Until
December 31, 2012, the retirement system shall pay 90% of the
monthly premium or membership or subscription fee for dental and
vision benefits described in subsection (4) for the benefit of each
health insurance dependent of a retirant receiving benefits under
subsection (4). Beginning January 1, 2013, any payment described in
this
subsection shall must not exceed 80% of the actual monthly
premium or membership or subscription fee. Except as otherwise
provided in subsections (7) to (15), for a health insurance
dependent of a retirant who is enrolled in the dental and vision
plan on January 1, 2013 and who is 65 years of age or older on that
date, the retirement system shall pay 90% of the entire monthly
premium or membership or subscription fee for dental and vision
benefits for the benefit of each health insurance dependent of the
retirant receiving benefits under subsection (4). Payment for
health benefits coverage for a health insurance dependent of a
retirant
shall must not be made after the retirant's death, unless
the retirant designated a retirement allowance beneficiary as
provided in section 85 and the dependent was covered or eligible
for coverage as a health insurance dependent of the retirant on the
retirant's date of death. Payment for health benefits coverage
shall
must not be made for a health insurance dependent after
the
later of the retirant's death or the retirement allowance
beneficiary's death. Payment under this subsection and subsection
(6) began October 1, 1985 for health insurance dependents who on
July 10, 1985 were covered by the hospital, medical-surgical, and
sick care benefits plan authorized by the retirement board and the
department. Payment under this subsection and subsection (6) for
other
health insurance dependents shall must not begin before
January 1, 1986. Except as otherwise provided in subsection (8),
this subsection does not apply to a retirant who first becomes a
member after June 30, 2008.
(6)
The payment described in subsection (5) shall must also
be
made for each health insurance dependent of a deceased member or
deceased duty disability retirant if a retirement allowance is
being paid to a retirement allowance beneficiary because of the
death of the member or duty disability retirant as provided in
section 43c(c), 89, or 90. Payment for health benefits coverage for
a
health insurance dependent shall must not be made after the
retirement allowance beneficiary's death.
(7)
The payments provided by this section shall must not
be
made on behalf of a retiring section 82 deferred member or health
insurance dependent of a deferred member having less than 21 full
years of attained credited service or the retiring deferred
member's
retirement allowance beneficiary, and shall must not
be
made on behalf of a retirement allowance beneficiary of a deferred
member who dies before retiring. The retirement system shall pay,
on behalf of a retiring section 82 deferred member or health
insurance dependent of a deferred member or a retirement allowance
beneficiary of a deceased deferred member, either of whose
allowance
is based upon on not less than 21 years of attained
credited service, 10% of the payments provided by this section,
increased by 10% for each attained full year of credited service
beyond 21 years, not to exceed 100% of the payments provided by
this section. This subsection applies to any member who first
became
a member on or before June 30, July 1, 2008 and attains
deferred status under section 82 after October 31, 1980.
(8) For a member or deferred member who first becomes a member
after June 30, 2008 and before September 4, 2012, the retirement
system shall pay up to 80% of the monthly premium or membership or
subscription fee for the hospital, medical-surgical, and sick care
benefits plan, the dental plan, and vision plan, or any combination
of the plans for the benefit of the retirant and his or her
retirement allowance beneficiary and health insurance dependents,
or for the benefit of the deceased member's retirement allowance
beneficiary if the retirant or deceased member has 25 years or more
of service credit under this act, and the retirant, deceased
retirant, or deceased member was at least 60 years of age at the
time of application for benefits under this section. If the
retirant or deceased member is less than 60 years of age at the
time of application for benefits under this section, the retirement
system shall pay 80% of the monthly premium or membership or
subscription fee for the hospital, medical-surgical, and sick care
benefits plan, the dental plan, and vision plan, or any combination
of the plans for the benefit of the retirant and his or her
retirement allowance beneficiary and the retirant's health
insurance dependents, or for the benefit of the deceased member's
retirement allowance beneficiary if the retirant or deceased member
has 25 or more years of service credit granted under section 68. If
a retirant, deceased retirant, or deceased member described in this
subsection has 10 or more but less than 25 years of service credit
under this act and the retirant was at least 60 years of age at the
time of application for benefits under this section, the retirement
system shall pay a portion of the monthly premium or membership or
subscription fee for the plans or combination of plans equal to the
product of 3% and the retirant's, deceased retirant's, or deceased
member's years of service for the first 10 years and 4% for each
year after the first 10 years, up to 80%. This subsection does not
apply to a member who receives a disability retirement allowance
under section 86 or 87 or to a deceased member's retirement
allowance beneficiary under section 90.
(9) The retirement system shall not pay the premiums or
membership or subscription fees under subsection (8) until the
retirant or retirement allowance beneficiary requests enrollment in
the plans or combination of plans in writing in the manner
prescribed by the retirement system. Not more than 1 year of
service credit shall be counted for purposes of this subsection and
subsection (8) in any school fiscal year.
(10) A member who retires under section 43b or 81 and who
elects
to purchase service credit on or after July 1, June 30, 2008
is not eligible for payments under this section for the hospital,
medical-surgical, and sick care benefits plan, the dental plan, or
vision plan, or any combination of the plans described in this
section until the first date that the member would have been
eligible to retire under section 43b or 81 if he or she had not
purchased the service credit and had accrued a sufficient amount of
service credit under section 68. A member who first becomes a
member
on or after July 1, June
30, 2008 shall is not
be eligible
for health benefits under this subsection until at least the time
of application under subsection (8). The retirement system shall
apply a method that enables it to make the determination under this
subsection.
(11) Except for a member who retires under section 86 or 87 or
a member who meets the requirements under subsection (7) or (8),
the retirement system shall not pay the benefits provided in
subsection (1) or (4) unless the member was employed and has
received a minimum total of 1/2 of a year of service credit granted
pursuant
to under section 68 during the 2 school fiscal years
immediately preceding the member's retirement allowance effective
date or the member has received a minimum of 1/10 of a year of
service
credit granted pursuant to under
section 68 during each of
the 5 school fiscal years immediately preceding the member's
retirement allowance effective date. This subsection does not apply
to a member who is unable to meet the service credit requirements
of this subsection because of 1 or more periods of unpaid leaves of
absence approved by the reporting unit during the period of leave
of absence, as a result of a mental or physical disability
supported by the member's doctor during the period of leave of
absence.
(12) Any retirant or retirement allowance beneficiary excluded
from payments under this section may participate in the hospital,
medical-surgical, and sick care benefits plan, the dental plan, or
vision plan, or any combination of the plans described in this
section in the manner prescribed by the retirement system at his or
her own cost.
(13) The hospital, medical-surgical, and sick care benefits
plan, dental plan, and vision plan that covers retirants,
retirement allowance beneficiaries, and health insurance dependents
pursuant
to under this section shall must contain
a coordination of
benefits provision that provides all of the following:
(a) If the person covered under the hospital, medical-
surgical,
and sick care benefits plan is also eligible for medicare
Medicare
or medicaid, Medicaid, or both, then the benefits under
medicare
Medicare or medicaid, Medicaid, or both, shall must be
determined before the benefits of the hospital, medical-surgical,
and
sick care benefits plan provided pursuant to under this
section.
(b) If the person covered under any of the plans provided by
this section is also covered under another plan that contains a
coordination
of benefits provision, the benefits shall must be
coordinated as provided by the coordination of benefits act, 1984
PA 64, MCL 550.251 to 550.255.
(c) If the person covered under any of the plans provided by
this section is also covered under another plan that does not
contain a coordination of benefits provision, the benefits under
the
other plan shall must be determined before the benefits of the
plan
provided pursuant to under
this section.
(14)
Beginning January 1, 2009, upon on
the death of the
retirant, a retirement allowance beneficiary who became a
retirement
allowance beneficiary under section 85(8) 85(8)(a) or
(c) or (9) is not a health insurance dependent and is not entitled
to health benefits under this section except as provided in this
subsection. Beginning January 1, 2009, a surviving spouse selected
as a retirement allowance beneficiary under section 85(8) or (9)
may elect the insurance coverages provided in this section if
payment for the elected coverages is the responsibility of the
surviving spouse and is paid in a manner prescribed by the
retirement system.
(15) This section does not apply to a retirant or a health
insurance dependent of that retirant under either of the following
circumstances:
(a) The individual first became a member or qualified
participant
on or after September 4, 3,
2012.
(b) The member made the election to opt out of health
insurance coverage or receives a separate retirement allowance
under section 91a.
(16) For purposes of this section:
(a) "Health insurance dependent" means any of the following:
(i) Except as provided in subsection (14), the spouse of the
retirant or the surviving spouse to whom the retirant or deceased
member was married at the time of the retirant's or deceased
member's death.
(ii) An unmarried child, by birth or adoption, of the retirant
or deceased member, until December 31 of the calendar year in which
the child becomes 19 years of age.
(iii) An unmarried child, by birth or adoption, of the
retirant or deceased member, until December 31 of the calendar year
in which the child becomes 25 years of age, who is enrolled as a
full-time student, and who is or was at the time of the retirant's
or deceased member's death a dependent of the retirant or deceased
member as defined in section 152 of the internal revenue code, 26
USC 152.
(iv) An unmarried child, by birth or adoption, of the retirant
or deceased member who is incapable of self-sustaining employment
because of mental or physical disability, and who is or was at the
time of the retirant's or deceased member's death a dependent of
the retirant or deceased member as defined in section 152 of the
internal revenue code, 26 USC 152.
(v) The parents of the retirant or deceased member, or the
parents of his or her spouse, who are residing in the household of
the retirant or retirement allowance beneficiary.
(vi) An unmarried child who is not the child by birth or
adoption of the retirant or deceased member but who otherwise
qualifies to be a health insurance dependent under subparagraph
(ii), (iii), or (iv), if the retirant or deceased member is the
legal guardian of the unmarried child.
(b)
"Medicaid" means benefits under the federal medicaid
Medicaid program established under title XIX of the social security
act, 42 USC 1396 to 1396w-5.
(c)
"Medicare" means benefits under the federal medicare
Medicare program established under title XVIII of the social
security
act, 42 USC 1395 to 1395kkk.1395lll.
Sec.
108. (1) This section is enacted pursuant to under
federal law that imposes certain administrative requirements and
benefit limitations for qualified governmental plans. This state
intends that the retirement system be a qualified pension plan
created in trust under section 401 of the internal revenue code, 26
USC
401, and that the trust be an exempt organization exempt from
taxation under section 501 of the internal revenue code, 26 USC
501. The department shall administer the retirement system to
fulfill
this the intent
under this subsection.
(2)
The retirement system shall must
be administered in
compliance with the provisions of section 415 of the internal
revenue code, 26 USC 415, and regulations under that section that
are applicable to governmental plans and, beginning January 1,
2010, applicable provisions of the final regulations issued by the
internal
revenue service Internal
Revenue Service on April 5, 2007.
Employer-financed benefits provided by the retirement system under
this
act shall must not exceed the applicable limitations set forth
in section 415 of the internal revenue code, 26 USC 415, as
adjusted by the commissioner of internal revenue under section
415(d) of the internal revenue code, 26 USC 415, to reflect cost-
of-living increases, and the retirement system shall adjust the
benefits, including benefits payable to retirants and retirement
allowance beneficiaries, subject to the limitation each calendar
year to conform with the adjusted limitation. For purposes of
section 415(b) of the internal revenue code, 26 USC 415, the
applicable
limitation shall apply applies
to aggregated benefits
received from all qualified pension plans for which the office of
retirement services coordinates administration of that limitation.
If there is a conflict between this section and another section of
this act, this section prevails.
(3)
The assets of the retirement system shall must be held in
trust and invested for the sole purpose of meeting the legitimate
obligations
of the retirement system and shall must not be used for
any
other purpose. The assets shall must
not be used for or
diverted to a purpose other than for the exclusive benefit of the
members, deferred members, retirants, and retirement allowance
beneficiaries.
(4) The retirement system shall return post-tax member
contributions made by a member and received by the retirement
system
to a member upon retirement, pursuant to internal revenue
service
under Internal Revenue
Service regulations and approved
internal
revenue service Internal
Revenue Service exclusion ratio
tables.
(5) The required beginning date for retirement allowances and
other
distributions shall must not be later than April 1 of the
calendar
year following after the calendar year in which the
employee attains age 70-1/2 or April 1 of the calendar year
following
after the calendar year in which the employee retires.
The required minimum distribution requirements imposed by section
401(a)(9)
of the internal revenue code, 26 USC 401, shall apply to
this act and must be administered in accordance with a reasonable
and good faith interpretation of the required minimum distribution
requirements for all years to which the required minimum
distribution requirements apply to the act.
(6) If the retirement system is terminated, the interest of
the members, deferred members, retirants, and retirement allowance
beneficiaries in the retirement system is nonforfeitable to the
extent funded as described in section 411(d)(3) of the internal
revenue
code, 26 USC 411, and the related internal revenue service
Internal Revenue regulations applicable to governmental plans.
(7) Notwithstanding any other provision of this act to the
contrary that would limit a distributee's election under this act,
a distributee may elect, at the time and in the manner prescribed
by the retirement board, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover. This subsection
applies
to distributions made on or after January 1, 1993. December
31, 1992. Beginning October 1, 2010, a nonspouse beneficiary may
elect to have any portion of an amount payable under this act that
is an eligible rollover distribution treated as a direct rollover
that will be paid in a direct trustee-to-trustee transfer to an
individual retirement account or individual retirement annuity
described in section 408(a) or (b) of the internal revenue code, 26
USC 408, that is established for the purpose of receiving a
distribution on behalf of the beneficiary and that will be treated
as an inherited individual retirement account or individual
retirement
annuity pursuant to under section 402(c)(11) of the
internal revenue code, 26 USC 402.
(8) For purposes of determining actuarial equivalent
retirement
allowances under sections 45 and 85(1)(b), (1)(c),
(1)(d),
85(1)(b), (c), and (d) and (2), the actuarially assumed
interest
rate shall must be 8% with utilization of the 1983 group
annuity
and mortality table.determined
by the director of the
department and the retirement board in consultation with the
actuary using the mortality tables recommended by the actuary.
(9) Notwithstanding any other provision of this act, the
compensation
of a member of the retirement system shall must be
taken into account for any year under the retirement system only to
the extent that it does not exceed the compensation limit
established in section 401(a)(17) of the internal revenue code, 26
USC 401, as adjusted by the commissioner of internal revenue. This
subsection
applies to any person individual
who first becomes a
member
of the retirement system on or after October 1, September
30, 1996.
(10) Notwithstanding any other provision of this act,
contributions, benefits, and service credit with respect to
qualified military service will be provided under the retirement
system in accordance with section 414(u) of the internal revenue
code, 26 USC 414. This subsection applies to all qualified military
service
on or after December 12, 11,
1994. Effective January 1,
2007, in accordance with section 401(a)(37) of the internal revenue
code, 26 USC 401, if a member dies while performing qualified
military service, for purposes of determining any death benefits
payable
under this act, the member shall be is treated as having
resumed and then terminated employment on account of death.