HOUSE BILL No. 5929


     April 18, 2002, Introduced by Rep. Vander Roest and referred to the Committee on Senior Health, Security and Retirement.


        A bill to amend 2002 PA 100, entitled

   "Public employee retirement benefit protection act,"

   by amending section 6 (MCL 38.1686).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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             Sec. 6.  (1)  A  EXCEPT AS OTHERWISE PROVIDED IN THIS SUB-

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        SECTION, A retirement system may elect by a majority vote of its

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        governing body to establish and administer an arrangement and

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        fund to pay accrued benefits of its members to its members to the

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        extent that the accrued benefits paid out of the fund would not

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        otherwise be payable under limitations in section 415 of the

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        internal revenue code.  An arrangement and fund established under

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        this section shall be kept separate from the pension assets of

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        participating units.  FOR A RETIREMENT SYSTEM ESTABLISHED BY A

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        POLITICAL SUBDIVISION OF THIS STATE, AN ARRANGEMENT AND FUND

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        ESTABLISHED UNDER THIS SUBSECTION SHALL ALSO BE APPROVED BY THE


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        GOVERNING BODY OF THE POLITICAL SUBDIVISION THAT ESTABLISHED THE

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        RETIREMENT SYSTEM, IF THE POLITICAL SUBDIVISION HAS A GOVERNING

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        BODY.

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             (2) If an arrangement and fund is established by a retire-

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        ment system under subsection (1), the arrangement and fund shall

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        be established and administered in accordance with section 415(m)

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        of the internal revenue code.  The governing board of the partic-

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        ipating unit or the department on behalf of a state unit may

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        establish and adopt policies and procedures for the arrangement

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        and fund.

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             (3) If an arrangement and fund is established under

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        subsection (1), the benefits that are paid from the fund shall be

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        paid out of employer contributions or other eligible assets.  The

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        governing board shall determine the amount of the employer con-

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        tribution that shall be allocated to the arrangement and fund.

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        Employer contributions and other eligible assets that are con-

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        tributed to the arrangement and fund shall be deposited in the

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        arrangement and fund before deposits are made to the pension

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        system of the participating unit.

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             (4) Nothing in this section is intended to limit the amount

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        of employer contributions that are contributed to a retirement

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        fund of a participating unit for the accrued benefits that are

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        allowed to be paid under section 415 of the internal revenue

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        code.









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