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Act 240 of 1943
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STATE EMPLOYEES' RETIREMENT ACT

Act 240 of 1943

AN ACT to provide for a state employees' retirement system; to create a state employees' retirement board and prescribe its powers and duties; to establish certain funds in connection with the retirement system; to require contributions to the retirement system by and on behalf of members and participants of the retirement system; to create certain accounts and provide for expenditures from those accounts; to prescribe the powers and duties of certain state and local officers and employees and certain state departments and agencies; to prescribe and make appropriations for the retirement system; and to prescribe penalties and provide remedies.


History: 1943, Act 240, Eff. July 30, 1943 ;-- Am. 1957, Act 232, Eff. Sept. 27, 1957 ;-- Am. 1984, Act 3, Eff. May 1, 1984 ;-- Am. 1989, Act 297, Imd. Eff. Jan. 3, 1990 ;-- Am. 1996, Act 389, Imd. Eff. Sept. 30, 1996 ;-- Am. 1996, Act 487, Eff. Mar. 31, 1997 ;-- Am. 2002, Act 99, Imd. Eff. Mar. 27, 2002


© 2009 Legislative Council, State of Michigan

The People of the State of Michigan enact:

DocumentTypeDescription
Section 38.1SectionShort title; meanings of words and phrases.
Section 38.1aSectionDefinitions; A, B.
Section 38.1bSectionDefinitions; B, C.
Section 38.1cSectionDefinitions; D.
Section 38.1dSectionDefinitions.
Section 38.1eSectionDefinitions; F to I.
Section 38.1fSectionDefinitions; M to O.
Section 38.1gSectionDefinitions; P.
Section 38.1hSectionDefinitions; R.
Section 38.1iSectionDefinitions; S, T.
Section 38.2SectionState employees' retirement system; creation; administration by retirement board; rules.
Section 38.3SectionRetirement board; appointment and terms of members.
Section 38.4SectionRetirement board; vacancies, vacation of office.
Section 38.5SectionRetirement board; oath; quorum; conducting business at public meeting; notice of meeting; compensation and expenses.
Section 38.6SectionRetirement board; officers and employees.
Section 38.7SectionRetirement system; actuarial valuation of assets and liabilities; investigation of mortality, service, and compensation of members.
Section 38.8SectionAdministrative board; investment of funds, purchase of life insurance or annuity, deposits.
Section 38.9SectionState treasurer as custodian of retirement system funds; powers and duties.
Section 38.10SectionRetirement board members and employees; interest in investments prohibited.
Section 38.11SectionEmployees' savings fund, employer's accumulation fund, annuity reserve fund, pension reserve fund, income fund, expense fund, and health insurance reserve fund; creation; health advance funding subaccount; description of funds as reference to accounting records of retirement system.
Section 38.12SectionAnnual statement of retirement funds in custody of state treasurer; availability of report and other writings to public; request for statement of credit.
Section 38.13SectionMembership in retirement system.
Section 38.13aSectionBlind or partially sighted licensed vending stand operators deemed employees; rights and benefits; eligibility; contribution as condition to service credit; blindness not deemed retirable disability; employer cost.
Section 38.13bSectionCredited service to include credit for service rendered to joint federal-state commission; conditions.
Section 38.14SectionInformation required of members by retirement board.
Section 38.15SectionOriginal members; prior service certification.
Section 38.16SectionCessation of membership; reemployment.
Section 38.17SectionService credited from state board of control for vocational education; conditions.
Section 38.17aSectionUse of credited service acquired in employ of governmental unit; “governmental unit of the state” defined.
Section 38.17bSectionCredited service to include service rendered certain universities.
Section 38.17cSectionRetirement system service credit for period of service under county department of social services; conditions.
Section 38.17dSectionCredited service to include service rendered to department of state police or its predecessor agencies, or to court of record; conditions.
Section 38.17e, 38.17fSectionRepealed. 1998, Act 205, Eff. Aug. 1, 1998.
Section 38.17gSectionParental leave; purchase of service credit.
Section 38.17hSectionFull-time service as employee with city, county, township, or village of this state; purchase of service credit.
Section 38.17iSectionFull-time service with federal government or as state employee with another state; purchase of service credit.
Section 38.17jSectionPurchase of combined total of more than 10 years prohibited; purchase of service credit in separate increments; future purchases not barred; refund; actuarial cost.
Section 38.17kSectionRepealed. 1998, Act 205, Eff. Aug. 1, 1998.
Section 38.17lSectionPurchase of additional service credit by employee of state accident fund, Michigan biologic products institute, or liquor control commission.
Section 38.17mSectionPurchase of service credit; limitation; refund.
Section 38.17nSectionCity employee; transfer or purchase of service credit.
Section 38.18SectionCredit for military or federal service; credit for prior service; conditions; computation.
Section 38.19SectionRetirement upon written application to retirement board; retirement without reduction in retirement allowance; definitions; layoff status because agency or inpatient facility designated for closure; conditions; certification; application; funding additional costs; employees of state accident fund, Michigan biologic products institute, or liquor control commission.
Section 38.19aSectionRetirement upon satisfaction of certain requirements; monthly retirement allowance supplement; benefits, salary, or remuneration precluding payment under subsection (2); payment of sick leave; payment by retirement system; amount payable by principal departments; member considered retirant; deposit by principal department; use of deposits; exception; monthly payment by Michigan employment security commission; service credit for participation in pay reduction plan C; death of retirant or applicant for retirement.
Section 38.19bSectionRight to retire and receive retirement allowance computed under MCL 38.20(1); application period; requirements; payment for accumulated sick leave in 60 monthly installments.
Section 38.19cSectionRight to retire and receive retirement allowance computed under MCL 38.20(1); application period; requirements; payment for accumulated sick leave in 60 monthly installments.
Section 38.19dSectionRight to retire and receive retirement allowance computed under MCL 38.20(1); application period; requirements; payment for accumulated sick leave in 60 monthly installments.
Section 38.19eSectionRight to retire and receive retirement allowance computed under MCL 38.20(1); application period; requirements; payment for amounts entitled to receive at retirement.
Section 38.19fSectionRetirement and receipt of retirement allowance; requirements; accumulated sick leave; request to extend effective date of retirement; calculation; state contract prohibited.
Section 38.19gSectionMember meeting certain requirements on or before November 1, 2002; computation of retirement allowance; payment of accumulated sick leave or annual leave; extension of effective date; participant in Tier 2.
Section 38.19hSectionPayments not tax exempt and subject to certain operations of law.
Section 38.19iSectionRetirement allowance; computation; accumulated sick leave; purchase of service credit; hiring under contract; limitation.
Section 38.19jSectionRetirement; requirements; accumulated annual leave, sick leave, and deferred leave hours; forfeiture; inclusion in calculation for determination of final average compensation; extension; request; retirement allowance calculation; "incentivized retirement application period" defined.
Section 38.20SectionComputation of retirement allowance; right to elect option; retirement before age 65; death of retirant; separation from service; department of mental health employee termination; recalculation and payment of retirement allowance; eligibility of state accident fund or Michigan biologic products institute employees to health care benefits and certain rights, privileges, and benefits.
Section 38.20aSectionMinimum retirement allowance.
Section 38.20bSectionIncrease in monthly retirement allowance; payment.
Section 38.20cSectionSupplement to retirement allowance.
Section 38.20dSectionHospitalization, medical, dental, and vision coverage insurance premium; computation and allocation of cost savings; payment by retirement board; “retirant” defined.
Section 38.20eSectionSupplemental retirement allowance; amount; payment.
Section 38.20fSectionSupplement to retirement allowance payable on or after September 30, 1976.
Section 38.20gSectionDetermining rate of investment return on retirement system assets and present value of retirement allowances; calculation and reduction of distribution income; crediting distribution units to retirant or retirement allowance beneficiary; calculation and payment of distribution amount; effect of death; increase in retirement allowance; computation of cumulative increase amount; supplemental payment.
Section 38.20hSectionSupplemental payments for retirants or retirement allowance beneficiaries with retirement allowance effective date before October 1, 1986; future adjustments.
Section 38.20iSectionSupplement.
Section 38.20jSectionMember not making election under MCL 38.50a; calculation of retirement allowance beginning April 1, 2012; items of compensation; accumulation of service credit; member making election under MCL 38.50a(1) and designation under MCL 38.50a(2); calculation of retirement allowance; items of compensation; accumulation of service credit; treatment of member as Tier 1; "attainment date" defined.
Section 38.21SectionDuty disability retirement.
Section 38.22SectionRetirement for disability at age 60; service retirement allowance; crediting 10 years of service.
Section 38.23SectionRetirement for disability before attaining age 60; benefits.
Section 38.24SectionNon-duty disability retirement.
Section 38.25SectionRetirement for disability.
Section 38.26SectionRepealed. 1955, Act 237, Eff. Oct. 24, 1955.
Section 38.27SectionDeath resulting from personal injury or disease arising out of and in course of state employment; survivor benefits.
Section 38.27aSectionRetirement allowances granted under MCL 38.27; adjustment.
Section 38.28SectionWithdrawal of member before retirement; refund of contributions; restoration on re-employment; court administrator.
Section 38.29SectionDeath before retirement; refund of contributions.
Section 38.30SectionWithholding refund of contributions.
Section 38.31SectionElection of regular retirement allowance or reduced retirement allowance; payment options; designation of beneficiary; effect of beneficiary's death or divorce; request by nonduty disability retirant to change elections; death of member before effective date of retirement.
Section 38.32SectionRemarriage of surviving spouse.
Section 38.33SectionDisability retirant under age 60; medical examination required; reduction of retirement allowance on account of gainful employment.
Section 38.34SectionDisability retirant; reinstatement to service, service credits allowable.
Section 38.35SectionContribution of 3% of employee compensation to funding account; "funding account" defined; refund of amounts contributed under subsection (1).
Section 38.35aSectionElection under MCL 38.50a; contribution.
Section 38.36, 38.37SectionRepealed. 1974, Act 216, Imd. Eff. July 19, 1974.
Section 38.38SectionAnnual level percent of payroll contribution rate; determination; basis; report; computation; amortization of unfunded actuarial accrued liability; annual appropriation to retirement system; transfer of funds; certification; difference between actual state contributions and product of contribution rates times aggregate compensations paid; submitting difference between estimated and actual aggregate compensation and estimated and actual contribution rate to legislature for appropriation; interest; deposit to health advance funding subaccount.
Section 38.39SectionRepealed. 1982, Act 316, Imd. Eff. Oct. 18, 1982.
Section 38.39aSectionReserves for retirement allowances; legislative determination of funds from which appropriations made.
Section 38.40SectionAllowances, benefits, and other rights; exemption from taxation; subject to tax beginning January 1, 2012; subject to public employee retirement benefit protection act.
Section 38.41SectionCorrection of errors in payment of retirement allowances.
Section 38.42SectionRetirement system records; falsification, penalty.
Section 38.43SectionRepealed. 1997, Act 148, Eff. Jan. 30, 1998.
Section 38.44SectionRights, privileges, and benefits of vested employee.
Section 38.44aSectionMember employed by state judicial council.
Section 38.45SectionDefinitions.
Section 38.46SectionRetirement or separation from employment of supplemental member with supplemental early retirement allowance; conditions; determination of eligibility.
Section 38.47SectionTemporary straight life supplemental early retirement allowance; payment; computation; electing optional form of payment.
Section 38.47aSectionReport.
Section 38.48SectionConservation officers.
Section 38.49SectionAdministration of retirement system as qualified pension plan under internal revenue code; requirements and benefit limitations; qualified military service.
Section 38.50SectionElection to terminate participation in Tier 1 and to participate in Tier 2; irrevocability; termination of employment; reemployment of deferred or former nonvested member; method of election; signature of spouse; waiver; election subject to eligible domestic relations order act; effect of disqualification notice from United States internal revenue service; exception.
Section 38.50aSectionElection to continue receiving credit for future service and compensation; designation; failure to make election; rescission; reemployment of former nonvested member; "attainment date" defined.
Section 38.51SectionTransfer of lump sum amount.
Section 38.52SectionCalculation of accrued cost savings for each fiscal year.
Section 38.53SectionMeanings of words and phrases; definitions; A to C.
Section 38.54SectionDefinitions; E to H.
Section 38.55SectionDefinitions; P to Y.
Section 38.56SectionState treasurer; powers and duties.
Section 38.57SectionHearing.
Section 38.58SectionInvestment of employer and employee contributions and earnings; direction by participant.
Section 38.59SectionPayment of administrative expenses.
Section 38.60SectionOther public sector retirement benefits plan; participation.
Section 38.61SectionElection by elected or appointed official.
Section 38.62SectionTransfer of amount; crediting and charging participant account.
Section 38.63SectionContributions by employer and participant.
Section 38.63aSectionTier 2 and tax-deferred accounts; terms and conditions.
Section 38.64SectionTier 2; vesting requirements.
Section 38.65SectionCrediting years of service accrued.
Section 38.66SectionRefund beneficiary.
Section 38.67SectionDistributions of accumulated balance.
Section 38.67aSectionDuty disability retirement allowance; supplemental benefit; health insurance coverage; exception.
Section 38.68SectionHealth insurance coverage.
Section 38.68aSectionAppropriation amount; purpose; work project; estimated completion date.
Section 38.68bSectionParticipant employed on or after January 1, 2012 or making election under subsection (5) or (6); health insurance coverage; contribution to tax-deferred account; opt-out; calculation of amount under subsection (7) and adjustment under subsection (8); implementation of subsections (5) to (11); method; report.
Section 38.68cSectionEmployment of retiree receiving retirement allowance; cessation of retirement payment; applicability; "employed by this state" defined; coordination of benefits provision; exceptions to subsection (1).
Section 38.68dSectionAdministration of changes; appropriation.
Section 38.68eSectionAppropriation.
Section 38.69SectionExemptions from taxation; subject to public employee retirement benefit protection law; right of setoff to recover overpayments; satisfaction of claims arising from embezzlement or fraud; correction of errors in records and actions.