June 21, 2007, Introduced by Rep. Ball and referred to the Committee on Oversight and Investigations.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending sections 69, 69c, 69f, 75, and 91 (MCL 38.1369,
38.1369c, 38.1369f, 38.1375, and 38.1391), sections 69, 69c, and 75
as amended and section 69f as added by 1989 PA 194 and section 91
as amended by 2004 PA 117.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 69. (1) As a condition for granting membership or prior
service credit under this act for out of system public education
service, a member shall pay to the retirement system an amount
equal to the amount the member would have contributed pursuant to
the schedule governing member contributions in effect at the time
of that service had the service been performed under this act or
former
Act No. 136 of the Public Acts of 1945 1945 PA 136, together
with regular interest from the end of the school fiscal year in
which service was performed to the semiannual anniversary of the
date following the payment, and shall have 5 years of reporting
unit
service credit under this act or former Act No. 136 of the
Public
Acts of 1945 1945 PA 136, following the out of system public
education service.
(2) A member shall not be entitled to a retirement allowance
based on out of system public education service that was performed
after July 1, 1974, until the member pays into the retirement
system for that service an amount equal to 5% of the member's full-
time or equated full-time compensation earned in the school fiscal
year before the school fiscal year in which the application to
purchase and payment for the service credit is made, multiplied by
the years of that service the member elects to purchase and unless
that service is followed by 5 years of reporting unit service
credit under this act. A member who purchases service credit on or
after August 1, 2007 shall complete at least 10 years of reporting
unit service under this act before the member purchases service
credit under this section.
(3) For the purposes of computing payment under this section,
the compensation amount used shall not be less than the highest
school fiscal year compensation previously earned by the member. If
the compensation amount used for computing payment under this
section exceeds the member's final average compensation determined
at the time of retirement, the payment required under this section
shall be recomputed using the member's final average compensation
and a refund shall be made based upon the recomputation. Credit
provided by this section shall not be used in satisfying the
minimum of 10 years of service credit required under this act for a
retirement allowance. A person who had employment with a community
mental health service program as described in section 6(2) shall
not be subject to the minimum of 10 years of service credit, if the
other requirements of this section are met.
(4) A member shall not receive more than 15 years of out of
system public education service. A member shall not receive more
out of system public education service than service performed under
this
act or former Act No. 136 of the Public Acts of 1945 1945 PA
136, unless, before July 1, 1974, the member applied for out of
system public education service credit based upon payment of
contributions
for that service credit as required under former Act
No.
136 of the Public Acts of 1945 1945
PA 136. The total out of
system public education service credited shall be used to compute
the member's retirement allowance if the minimum service
requirements
performed under this act or former Act No. 136 of the
Public
Acts of 1945 1945 PA 136 are met.
(5) If a member who made payment for out of system public
education service dies and a retirement allowance beneficiary has
not been designated, or if the member withdraws from service before
his or her retirement becomes effective, the payment made by the
member shall be refunded to the member or to the member's refund
beneficiary upon request.
(6) Out of system public education service shall not be
creditable toward retirement under this act if the member is or
will be receiving a retirement allowance for the same service from
another retirement system.
(7) Out of system public education service shall not be
creditable under this act unless similar service performed in a
reporting unit would be creditable.
(8) Before January 31, 1991, a member may elect to purchase
service credit as an elementary or secondary teacher at a United
States armed forces military base in the United States or a foreign
country upon payment to the retirement board of the actuarial cost.
Sec. 69c. (1) A member may elect to purchase service credit
for service performed as an employee in a nonpublic elementary or
secondary educational institution or a nonpublic 2- or 4-year
institution of higher education in this state, in other states of
the United States, or in the territorial possessions of the United
States upon request and presentation of documentation of the
employment rendered that is verifiable from official employment or
payroll records or other acceptable documentation as determined by
the retirement board, and upon payment to the retirement system of
the actuarial cost.
(2) Before January 31, 1991, a member may elect to purchase
service credit for service performed as an employee in a foreign
country at a school for United States personnel or dependents of
the United States military or United States department of state
personnel; service performed as a full-time teacher with the job
corps created pursuant to section 422 of part B of title IV of the
job
training partnership act, Public Law 97-300, 29 U.S.C. USC
1692; service performed as a teacher in a trust territory or former
trust territory of the United States; or service performed as a
teacher on an Indian reservation in this country; upon request and
presentation of documentation of the employment rendered that is
verifiable from official employment or payroll records or other
acceptable documentation as determined by the retirement board, and
upon payment to the retirement system of the actuarial cost.
(3)
Service For a member who purchases
service credit before
July 31, 2007, service shall not be credited under this section
unless the service being purchased is followed by at least 5 years
of
reporting unit service credit under this act or former Act No.
136
of the Public Acts of 1945 1945
PA 136. For a member who
purchases service credit on or after August 1, 2007, service shall
not be credited under this section unless the member has completed
at least 10 years of reporting unit service under this act before
the service is credited. Service purchased under this section shall
not be used to satisfy the minimum of 10 years of service credit
required to receive a retirement allowance under this act. The
total service credited under subsections (1) and (2) shall not
exceed 5 years.
(4) If a member who made payment for service under this
section dies and a retirement allowance beneficiary has not been
designated, or if the member withdraws from service before his or
her retirement becomes effective, the payment made by the member
shall be refunded to the member or to the member's refund
beneficiary upon request.
(5) Service shall not be credited under this section if the
member is or will be receiving a pension or annuity for the same
service from another retirement system.
(6) A person who became a retirant with a retirement allowance
effective date on or after January 1, 1988 and on or before
December 21, 1988 shall be entitled to purchase service credit for
service performed as an employee in a nonpublic elementary or
secondary educational institution or a nonpublic 2- or 4-year
institution of higher education as provided by this section.
Service credit purchased pursuant to this subsection shall be
purchased before July 1, 1989, or the expiration of 6 months after
December 21, 1988, whichever is later. The monthly retirement
allowance of a retirant entitled to purchase service credit under
this subsection shall be recomputed based upon the additional
service credit. The recomputed monthly amount shall be payable
beginning on the first day of the month following the month in
which payment is received by the retirement system.
(7) As used in this section:
(a) "Nonpublic elementary or secondary educational
institution" means an institution that offers or provides an
organized course of academic study primarily oriented toward the
awarding of high school diplomas. Nonpublic elementary or secondary
educational institution does not include a proprietary school.
(b) "Nonpublic 2- or 4-year institution of higher education"
means an institution that offers an organized course of academic
study primarily oriented toward the awarding of associate,
baccalaureate, master's, doctoral, or other academic degrees.
Nonpublic 2- or 4-year institution of higher education does not
include a proprietary school.
(c) "Proprietary school" means a school that uses a certain
plan or method to teach a trade, occupation, or vocation for a
consideration, reward, or promise. Proprietary school includes, but
is not limited to, a private business, trade, or home study school.
Sec. 69f. (1) A member may elect to purchase not more than 5
years of service credit less the number of years of service credit
purchased under sections 6(2)(c), (d), (e), and (f), 64(3), (4),
and (5), 69a, 69b, 69c(2), 69d, 69e, 74a, 74b, 77, and 78, upon
request and payment to the retirement system of the actuarial cost.
(2) Service credit purchased under this section may not be
used to satisfy the minimum of 10 years of service credit required
to receive a retirement allowance under this act.
(3) Service credit purchased under this section shall not be
used to satisfy the service credit requirement set forth in section
81(1)(a) for a retirement allowance paid prior to age 46 as
provided by section 43b(a).
(4) If a member who made payment for service under this
section dies and a retirement allowance is not payable, or if the
member withdraws from service and a retirement allowance is not
payable, the payment made by the member shall be refunded to the
member or to the member's refund beneficiary upon request.
(5) Service purchased under this section shall not be credited
to a member who purchases service credit on or after August 1, 2007
unless the member completes at least 10 years of reporting unit
service under this act before the member purchases service credit
under this section.
Sec. 75. (1) A member who left or leaves service as a public
school employee for purposes of maternity or paternity or child
rearing, and returns to service as a public school employee, or a
person performing out of system public education service who leaves
that service for purposes of maternity, paternity, or child rearing
and who subsequently becomes a member of this retirement system,
without other intervening employment of more than 20 hours per week
for each week for which service credit is claimed, may purchase
service credit for the time period or periods during which the
person was separated from service as a public school employee or
during which the person was separated from performing out of system
public education service because of maternity or paternity or child
rearing, upon request and payment to the retirement system of the
actuarial cost. The total service credited under this section shall
not exceed 5 years. A member requesting purchase of service credit
under this section shall certify to the board the purpose for which
the member took leave and was separated from service as a public
school employee.
(2)
Service credit purchased under this section may shall not
be used to satisfy the minimum of 10 years of service credit
required to receive a retirement allowance under this act.
(3) If a member who made payment under this section dies and a
retirement allowance beneficiary has not been designated, or if the
member leaves reporting unit service before his or her retirement
becomes effective, the payment made by the member shall be refunded
upon request to the member or to the member's refund beneficiary.
(4) A member who reduces hours of employment with a reporting
unit for purposes of maternity, paternity, or child rearing or a
person who reduces hours of out of system public education service
for purposes of maternity, paternity, or child rearing and who
subsequently becomes a member of this retirement system may
purchase service credit for those hours by which employment was
reduced if all other requirements of this section are met.
(5) Service purchased under this section shall not be credited
to a member who purchases service credit on or after July 1, 2008
unless the member completes at least 10 years of reporting unit
service under this act before the member purchases service credit
under this section.
Sec. 91. (1) 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.
(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 have an
amount equal to the cost chargeable to a medicare recipient for
part B of medicare deducted from his or her retirement allowance.
(4) The retirement system shall pay 90% of the monthly premium
or membership or subscription fee for dental, vision, and hearing
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 begin under
this subsection upon approval by the retirement board and the
department of plan coverage and a plan provider.
(5) 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). Payment shall not
exceed 90% of the actual monthly premium or membership or
subscription fee. The retirement system shall pay 90% of the
monthly premium or membership or subscription fee for dental,
vision, and hearing benefits described in subsection (4) for the
benefit of each health insurance dependent of a retirant receiving
benefits under subsection (4). Payment for health benefits coverage
for a health insurance dependent of a retirant shall 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 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 not begin before January 1, 1986.
(6) The payment described in subsection (5) shall 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 not be made after the retirement
allowance beneficiary's death.
(7) The payments provided by this section shall 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 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
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%. This subsection applies to any member who attains
deferred status under section 82 after October 31, 1980.
(8) This subsection only applies to a member who elects to
purchase service credit on or after August 1, 2007. Except as
provided in section 73, a member who elects to purchase service
credit on or after August 1, 2007 shall have his or her benefits
under this section determined by the retirement system in the
manner prescribed in this subsection. The retirement system shall
first determine whether the purchase of service credit allowed the
member to retire earlier than the member would have retired without
the purchase of service credit. The retirement system shall then
determine the difference between the member's effective date and
the effective date that the member would have retired if the member
had not purchased the service credit during the time he or she was
a member. The member who is subject to this subsection shall not be
eligible for health care benefits under this section until the
effective date that the member would have retired if the member had
not purchased the service credit during the time he or she was a
member. Except for a member who retires under section 86 or 87 or a
member who meets the requirements under subsection (7), the
retirement system shall not pay the benefits provided in subsection
(1) unless the member was employed and has received a minimum total
of 1/2 of a year of service credit granted pursuant to 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
section 68 during each of the 5 school fiscal years immediately
preceding the member's retirement allowance effective date.
(9) (8) 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, vision plan, or hearing 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.
(10) (9)
The hospital, medical-surgical, and
sick care
benefits plan, dental plan, vision plan, and hearing plan that
covers retirants, retirement allowance beneficiaries, and health
insurance dependents pursuant to this section shall 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
or medicaid, or both, then the benefits under medicare or medicaid,
or both, shall be determined before the benefits of the hospital,
medical-surgical, and sick care benefits plan provided pursuant to
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 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 be determined before the benefits of the plan
provided pursuant to this section.
(11) (10)
For purposes of this section:
(a) "Health insurance dependent" means any of the following:
(i) 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.
(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.
(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
program established under title XIX of the social security act,
chapter 531, 49 Stat. 620, 42 U.S.C. 1396 to 1396f, 1396g-1 to
1396r-6, and 1396r-8 to 1396v.
(c) "Medicare" means benefits under the federal medicare
program established under title XVIII of the social security act,
chapter 531, 49 Stat. 620, 42 U.S.C. 1395 to 1395b, 1395b-2, 1395b-
6 to 1395b-7, 1395c to 1395i, 1395i-2 to 1395i-5, 1395j to 1395t,
1395u to 1395w, 1395w-2 to 1395w-4, 1395w-21 to 1395w-28, 1395x to
1395yy, and 1395bbb to 1395ggg.
Enacting section 1. If any section or part of a section of
this act is for any reason held to be invalid or unconstitutional,
the holding does not affect the validity of the remaining sections
of this act or the act in its entirety.