March 11, 2010, Introduced by Rep. Moss and referred to the Committee on Oversight and Investigations.
A bill to amend 1943 PA 240, entitled
"State employees' retirement act,"
by amending sections 20, 20d, 55, 65, 67a, 68, and 68c (MCL 38.20,
38.20d, 38.55, 38.65, 38.67a, 38.68, and 38.68c), sections 20 and
20d as amended by 2002 PA 93, section 55 as amended by 2004 PA 33,
sections 65 and 68 as added by 1996 PA 487, section 67a as amended
by 2004 PA 109, and section 68c as added by 2007 PA 95, and by
adding sections 19j, 20i, 35, and 68d.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 19j. (1) Notwithstanding section 19, a member may retire
and receive a retirement allowance computed under this section if
the member meets all of the following requirements:
(a) On the last day of the month preceding the effective date
of his or her retirement as stated in subdivision (g), the member's
age and length of credited service meets the requirements in
section 19 for a retirement allowance that is not subject to
reduction pursuant to section 19(2).
(b) The member occupies a position in the classified state
civil service, has classified civil service status, or is an
individual not described in subsection (2)(b).
(c) The member is not eligible for a supplemental early
retirement under section 46 as a covered employee defined in
section 45, or if the member is eligible for a supplemental early
retirement under section 46 as a covered employee defined in
section 45, the member meets the requirements of subsection (6).
(d) The member is not a conservation officer as described in
section 48, or if the member is a conservation officer as described
in section 48, the member meets the requirements of subsection (6).
(e) The member occupies a position subject to the same state
health plan preferred provider organization for employees first
hired on or after April 1, 2010.
(f) The member was employed by this state or the legislature
for the 6-month period ending on April 15, 2010. A member who is on
layoff status from state employment is considered to have met the
employment requirement of this subdivision.
(g) The member executes and files a written application with
the retirement board, on or after April 15, 2010, but not later
than May 15, 2010, stating a date on or after July 1, 2010, but not
later than October 1, 2010, on which he or she desires to retire. A
member may withdraw a written application on or before May 31,
2010. A written application submitted by a member and not withdrawn
on or before May 31, 2010 is irrevocable.
(2) Notwithstanding section 19, a member may retire and
receive a retirement allowance computed under this section if the
member meets all of the following requirements:
(a) On the last day of the month preceding the effective date
of his or her retirement, the member's age and length of credited
service meets the requirements in section 19 for a retirement
allowance that is not subject to reduction pursuant to section
19(2).
(b) The member is an employee of the legislative branch of
state government without classified civil service status, is an
employee of the judicial branch of state government, or is an
unclassified state employee not within the classified state civil
service.
(c) The member is not eligible for a supplemental early
retirement under section 46 as a covered employee defined in
section 45, or if the member is eligible for a supplemental early
retirement under section 46 as a covered employee defined in
section 45, the member meets the requirements of subsection (6).
(d) The member is not a conservation officer as described in
section 48, or if the member is a conservation officer as described
in section 48, the member meets the requirements of subsection (6).
(e) The member was employed by this state for the 6-month
period ending on April 15, 2010. A member who is on layoff status
from state employment is considered to have met the employment
requirement of this subdivision.
(f) The member executes and files a written application with
the retirement board, on or after April 15, 2010, but not later
than May 15, 2010, stating a date on or after July 1, 2010, but not
later than October 1, 2010, on which he or she desires to retire. A
member may withdraw a written application on or before May 31,
2010. A written application submitted by a member and not withdrawn
on or before May 31, 2010 is irrevocable.
(3) Notwithstanding any other provision of this act, a member
electing to retire under this section agrees that any amount that
he or she would otherwise be entitled to be received in a lump sum
at retirement on account of accumulated annual leave, sick leave,
and other deferred leave hours shall be paid in 60 consecutive
equal monthly installments beginning on or after October 1, 2010.
Payments received under this subsection may not be used to purchase
service credit under this act. These payments for accumulated
annual leave, sick leave, and other deferred leave hours are to be
paid from funds appropriated to the appointing authority and not
from funds of the retirement system. These payments shall be
considered taxable income under the income tax act of 1967, 1967 PA
281, MCL 206.1 to 206.532. This subsection does not apply to banked
leave time.
(4) The director of a principal department of the executive
branch of state government may request that the effective date of
retirement under subsection (1) or (2) of a member employed by that
department be extended to a date not later than April 1, 2011. To
make a request under this subsection, the director shall submit a
written request and the written concurrence of the member to the
director of the office of the state employer and the state budget
director on or before June 15, 2010. Upon receipt of the written
request and concurrence, the director of the office of the state
employer and the state budget director may extend the effective
date of retirement of a member otherwise eligible to retire under
subsection (1) or (2) to a date not later than April 1, 2011. Upon
written approval of the senate majority leader for a member who is
an employee of the senate, the speaker of the house of
representatives for a member who is an employee of the house of
representatives, the senate majority leader and the speaker of the
house of representatives for a member who is an employee of the
office of the auditor general, director or chair of the legislative
retirement system for a member who is an employee of the
legislative retirement system, or the chair and alternate chair of
the legislative council for a member who is an employee of an
agency under the jurisdiction of the legislative council, and upon
written concurrence of the member, the effective date of retirement
for that member under subsection (2) may be extended to a date not
later than April 1, 2011. Upon written approval of the chief
justice for a member who is an employee of the judicial branch,
including, but not limited to, members described in section 44a,
and upon written concurrence of the member, the effective date of
retirement for that member under subsection (2) may be extended to
a date not later than April 1, 2011. The individual or individuals
who approve the extension of an effective date of retirement for a
member who is an employee of the legislature, supreme court, or
court of appeals shall submit written notification to the office of
retirement services of all extensions approved on or before June
15, 2010.
(5) Upon his or her retirement as provided in this section, a
member who did not make an election under section 50 to terminate
membership in Tier 1 and become a qualified participant in Tier 2
shall receive a retirement allowance equal to the member's number
of years and fraction of a year of credited service multiplied by
1.6% of his or her final average compensation. Except for the
calculation provided in this subsection, the member's retirement
allowance is subject to section 20.
(6) A member who is a conservation officer as described in
section 48 or a member who is eligible for a supplemental early
retirement under section 46 as a covered employee defined in
section 45 may make the election and be eligible for a retirement
allowance under this section if the member meets the eligibility
requirements of this section. A member who meets the eligibility
requirements and makes an election under this section shall receive
a retirement allowance calculated under this section and shall not
be eligible for any supplemental benefit that he or she may have
been eligible for had he or she retired under sections 45 to 48.
(7) Any additional costs to the retirement system as a result
of the retirement allowance calculations under subsection (5) shall
be amortized over a 5-year period.
Sec.
20. (1) Upon Except as
otherwise provided in section 20l,
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. 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.
Sec. 20d. (1) On and after July 1, 1974, hospitalization and
medical coverage insurance premium payable by any retirant or his
or her beneficiary and his or her dependents under any group health
plan authorized by the Michigan civil service commission and the
department of technology, management, and budget shall be paid by
the retirement board from the health insurance reserve fund created
in section 11. The amount payable shall be in the same proportion
of premium payable by the state of Michigan for the classified
employees occupying positions in the state civil service who
commenced employment with the state before April 1, 2010. The
hospitalization and medical insurance premium payable shall be paid
from appropriations made for this purpose to the health insurance
reserve fund sufficient to cover the premium payment needed to be
made.
(2) Effective January 1, 1988, 90% of the premium
payable by a
retirant
or the retirant's beneficiary and his or her dependents
for
dental coverage or vision coverage, or both, under any group
plan
authorized by the Michigan civil service commission and the
department
of management and budget shall be paid by the retirement
board
from the health insurance reserve fund created in section 11.
The dental coverage and vision coverage insurance premium payable
by any retirant who retired on or before October 1, 2010 or whose
effective date of retirement has been extended under section
19j(4), or his or her beneficiary and his or her dependents under
any group health plan authorized by the civil service commission
and the department of technology, management, and budget, shall be
paid by the retirement board from the health insurance reserve fund
created in section 11. The amount payable shall be in the same
proportion of premium payable by this state for the classified
employees occupying positions in the state civil service, who
commenced state employment before April 1, 2010. The dental or
vision insurance premium payable shall be paid from appropriations
made for this purpose to the health insurance reserve fund
sufficient to cover the premium payment needed to be made.
(3) Any retirant or his or her beneficiary and his or her
dependents excluded from state subsidized insurance premiums may
participate in the dental coverage or vision coverage provided by
this section in the manner prescribed by the retirement system at
his or her own cost.
(4) (3)
The department of technology, management, and budget
shall calculate for each fiscal year any cost savings that have
accrued to this state as a result of the implementation of 1996 PA
487 over the costs that would have been incurred by this state to
fund premiums payable pursuant to section 68 had 1996 PA 487 not
been implemented. The total amount of the cost savings, if any,
shall be allocated to the health advance funding subaccount created
under section 11(9).
(5) (4)
On and after March 31, 1997,
the retirement system
shall also pay health insurance premiums described in this section
in the manner prescribed in section 68.
(6) (5)
For purposes of this section,
"retirant" includes a
person who retires under section 306 or 410 of the Michigan
military act, 1967 PA 150, MCL 32.706 and 32.810.
Sec. 20i. (1) A member who first reaches 30 years of earned
service credit on or after October 1, 2010 shall have no more than
30 years of earned service credit included in the calculation of a
retirement allowance upon retirement.
(2) A member who has more than 30 years of earned service
credit as of October 1, 2010 shall have no more than the years of
earned service credit accrued as of October 1, 2010 included in the
calculation of a retirement allowance upon retirement.
(3) Beginning on October 1, 2010, any member described in
subsection (1) or (2) shall cease accruing earned service credit in
Tier 1 for purposes of calculating a retirement allowance and shall
become a qualified participant in Tier 2 under section 55. The
retirement system shall determine the method and time frame for the
transition of participation between Tier 1 and Tier 2.
(4) This section does not apply to a member whose effective
date of retirement has been extended under section 19j(4).
(5) For purposes of this section, "earned service credit" does
not include any service credit that is purchased under this act.
Sec. 35. (1) Beginning October 1, 2010 and ending on the date
the Tier 1 member accrues 30 years of earned service credit, each
Tier 1 member shall contribute an amount equal to 3% of his or her
compensation to the employees' savings fund.
(2) The retirement system shall determine a method of
deducting the contributions provided for in this section from the
compensation of each member for each payroll and each payroll
period.
(3) This state shall pick up the member contributions required
by subsection (1) for all compensation earned after October 1,
2010. Contributions picked up shall be treated as employer
contributions in determining tax treatment under the internal
revenue code. This state shall pay these member contributions from
the same source of funds that is used in paying compensation to the
member. This state may pick up these contributions by a reduction
in the cash salary of the member.
(4) This section does not apply to a member whose effective
date of retirement has been extended under section 19j(4).
Sec. 55. (1) "Plan document" means the document that contains
the provisions and procedures of Tier 2 in conformity with this act
and the internal revenue code.
(2) "Qualified participant" means an individual who is a
participant of Tier 2 and who meets 1 of the following
requirements:
(a) An individual who is first employed and entered upon the
payroll of his or her employer on or after March 31, 1997, and who
before March 31, 1997 would have been eligible to be a member of
Tier 1.
(b) An individual who elects to terminate membership in Tier 1
and who elects to participate in Tier 2 in the manner prescribed in
section 50.
(c) An individual who has reached the maximum amount of years
of earned service credit for purposes of calculation of a
retirement allowance pursuant to section 20i. Notwithstanding any
other provision of this act, an individual described in this
subsection shall not be treated as a qualified participant for
purposes of sections 67a and 68.
(3) "Refund beneficiary" means an individual nominated by a
qualified participant or a former qualified participant under
section 66 to receive a distribution of the participant's
accumulated balance in the manner prescribed in section 67.
(4) "State treasurer" means the treasurer of this state.
(5) Except as otherwise provided in this subsection, "year of
service" means each period during which a qualified participant is
employed by the employer and is credited with 2,080 hours of
service. The Tier 2 plan administrator and the plan document may
provide for a lesser number of annual hours and a maximum number of
hours per pay period for any classification of employees, provided
that no participant shall receive credit for more than 1 year of
service for any 12-month period of employment. Beginning January 1,
2003, full service credit shall also be given to a participant for
furlough hours, for required 1-day layoffs, for required and
designated temporary layoffs, for a year in which a participant
temporarily leaves employment to enter active military duty and
then dies during that active military duty, and for participation
in the banked leave time program. In the event a terminated
participant is reemployed, such individual shall retain credit for
all full and partial years of service completed prior to such
reemployment, for purposes of determining his or her vesting
percentage in any employer contributions made pursuant to section
63(2) and (3) after his or her reemployment.
Sec. 65. A qualified participant who was a member, deferred
member, or former nonvested member of Tier 1 who makes an election
to participate in Tier 2 pursuant to section 50, or was a member
who has reached the maximum amount of years of earned service
credit for purposes of calculation of a retirement allowance
pursuant to section 20i, shall be credited with the years of
service accrued under Tier 1 on the effective date of participation
in Tier 2 for the purpose of meeting the vesting requirements for
benefits under section 64.
Sec. 67a. (1) Except as otherwise provided in section 33, a
qualified participant who becomes totally incapacitated for duty
because of a personal injury or disease shall be retired if all of
the following apply:
(a) Within 1 year after the qualified participant becomes
totally incapacitated or at a later date if the later date is
approved by the retirement board, the qualified participant, the
qualified participant's personal representative or guardian, his or
her department head, or the state personnel director files an
application on behalf of the member with the retirement board.
(b) The retirement board finds that the qualified
participant's personal injury or disease is the natural and
proximate result of the qualified participant's performance of
duty.
(c) A medical advisor conducts a medical examination of the
qualified participant and certifies in writing that the qualified
participant is mentally or physically totally incapacitated for
further performance of duty, that the total incapacitation is
probably permanent, and that the qualified participant should be
retired.
(d) The retirement board concurs in the recommendation of the
medical advisor.
(2) If the retirement board grants the application of the
qualified participant under subsection (1), the qualified
participant shall be granted a supplemental benefit equivalent to
the amount provided in section 23 as if the former qualified
participant had retired under section 21, which supplemental
benefit shall be offset by the value of the distribution of his or
her accumulated balance as determined by the retirement system upon
becoming a former qualified participant pursuant to section 67.
(3) If a qualified participant dies as a result of a personal
injury or disease arising out of and in the course of his or her
employment with this state, or if a former qualified participant
who retired under subsection (1) who dies before becoming age 60
and within 3 years after the former qualified participant's
disability retirement from the same causes from which he or she
separated, and such death or illness or injuries resulting in death
are found by the retirement board to have been the sole and
exclusive result of employment with this state, a supplemental
benefit shall be granted equivalent to the amount provided for in
section 27 had the former qualified participant been considered
retired under section 27, which supplemental benefit shall be
offset by the value of the distribution of his or her accumulated
balance upon becoming a former qualified participant pursuant to
section 67.
(4) A qualified participant, former qualified participant, or
beneficiary of a deceased participant, which participant is
eligible for a duty disability retirement allowance pursuant to
subsection (1), (2), or (3), is eligible for health insurance
coverage under section 20d in all respects and under the same terms
as would be a retirant and his or her beneficiaries under Tier 1.
(5) Except as otherwise provided in section 33, a qualified
participant who becomes totally incapacitated for duty because of a
personal injury or disease that is not the natural and proximate
result of the qualified participant's performance of duty may be
retired if all of the following apply:
(a) Within 1 year after the qualified participant becomes
totally incapacitated or at a later date if the later date is
approved by the retirement board, the qualified participant, the
qualified participant's personal representative or guardian, the
qualified participant's department head, or the state personnel
director files an application on behalf of the qualified
participant with the retirement board.
(b) A medical advisor conducts a medical examination of the
qualified participant and certifies in writing that the qualified
participant is mentally or physically totally incapacitated for
further performance of duty, that the incapacitation is likely to
be permanent, and that the qualified participant should be retired.
(c) The qualified participant has been a state employee for at
least 10 years.
(6) If the retirement board grants the application of the
qualified participant under subsection (5), the qualified
participant shall be granted a supplemental benefit equivalent to
the amount provided for in section 25 as if the qualified
participant had retired under section 24. The supplemental benefit
shall be offset by the value of the distribution of his or her
accumulated balance as determined by the retirement system upon
becoming a former qualified participant pursuant to section 67.
(7) If a qualified participant who has been a state employee
for the number of years necessary to vest under Tier 1 dies as a
result of causes occurring not in the performance of duty to this
state, a supplemental benefit shall be granted equivalent to the
amount provided for in section 25 had the former qualified
participant been considered retired under section 24, which
supplemental benefit shall be offset by the value of the
distribution of his or her accumulated balance as determined by the
retirement system upon becoming a former qualified participant
pursuant to section 67.
(8) A qualified participant, former qualified participant, or
beneficiary of a deceased participant, which participant is
eligible for a disability retirement allowance pursuant to
subsection (4) or (5), is eligible for health insurance coverage
under section 20d in all respects and under the same terms as would
be a retirant and his or her beneficiaries under Tier 1.
(9) This section does not apply to an individual who has
reached the maximum amount of earned service for purposes of
calculation of a retirement allowance pursuant to section 20i.
Sec. 68. (1) A former qualified participant may elect health
insurance benefits in the manner prescribed in this section if he
or she meets both of the following requirements:
(a) The former qualified participant is vested in health
benefits under section 64(2).
(b) The former qualified participant meets or exceeds the
benefit commencement age employed in the actuarial present value
calculation under section 51 and the service requirements that
would have applied to that former participant under Tier 1 for
receiving health insurance coverage under section 20d, if that
former participant was a member of Tier 1.
(2) A former qualified participant who is eligible to elect
health insurance coverage under subsection (1) may elect health
insurance coverage in a health benefit plan or plans as authorized
by
section 20d. , or in another plan as provided in subsection (6).
A former qualified participant who is eligible to elect health
insurance coverage under subsection (1) may also elect health
insurance coverage for his or her health benefit dependents, if
any. A surviving health benefit dependent of a deceased former
qualified participant who is eligible to elect health insurance
coverage under subsection (1) may elect health insurance coverage
in the manner prescribed in this section.
(3)
Except as otherwise provided in subsection (6), an An
individual who elects health insurance coverage under this section
shall become a member of a health insurance coverage group
authorized pursuant to section 20d.
(4) For a former qualified participant who is eligible to
elect health insurance coverage under subsection (1) and who is
vested in those benefits under section 64(2)(a), and for his or her
health benefit dependents, this state shall pay a portion of the
health insurance premium as calculated under this subsection on a
cash disbursement method. An individual described in this
subsection who elects health insurance coverage under this section
shall pay to the retirement system the remaining portion of the
health insurance coverage premium not paid by this state under this
subsection.
The For a former qualified
participant who commenced
state employment before April 1, 2010 and for his or her health
benefit dependents, the portion of the health insurance coverage
premium paid by this state under this subsection shall be equal to
the product of 3% and the former qualified participant's years of
service,
up to 30 years, and but shall not exceed the lesser of 90%
of the payments for health insurance coverage or the portion of the
health insurance coverage premiums payable by this state for a
retirant, his or her beneficiary, and his or her dependents under
section 20d. If the individual elects the health insurance coverage
provided under section 20d, the state shall transfer its portion of
the amount calculated under this subsection to the health insurance
reserve fund created by section 11. For a former qualified
participant who commenced state employment on or after April 1,
2010 and for his or her health benefit dependents, the portion of
the health insurance coverage premium paid by this state under this
subsection shall be equal to the product of 3% and the former
qualified participant's years of service, up to 30 years, but shall
not exceed the lesser of the portion of the health insurance
coverage premiums payable by this state for a retirant, his or her
beneficiary, and his or her dependents under section 20d or the
portion of the health insurance coverage premiums payable by this
state for a member who occupies a position in the classified state
civil service or has classified civil service status commencing
state employment on or after April 1, 2010.
(5) For a former qualified participant who is eligible to
elect health insurance coverage under subsection (1) and who is
vested in those benefits under section 64(2)(b), and for his or her
health benefit dependents, this state shall pay a portion of the
health insurance premium as calculated under this subsection on a
cash disbursement method. An individual described in this
subsection who elects health insurance coverage under this section
shall pay to the retirement system the remaining portion of the
health insurance coverage premium not paid by this state under this
subsection. The portion of the health insurance coverage premium
paid by this state under this subsection shall be equal to the
premium amounts paid on behalf of retirants of Tier 1 for health
insurance coverage under section 20d. If the individual elects the
health insurance coverage provided under section 20d, the state
shall transfer its portion of the amount calculated under this
subsection to the health insurance reserve fund created by section
11.
(6)
A former qualified participant or health benefit dependent
who
is eligible to elect health insurance coverage under this
section
and who elects health insurance coverage under a different
plan
than the plan authorized under section 20d may elect to have
an
amount up to the amount of the retirement system's share of the
monthly
health insurance premium subsidy provided in this section
paid
by the retirement system directly to the other health
insurance
plan or to a medical savings account established pursuant
to
section 220 of the internal revenue code, to the extent allowed
by
law or under the provisions and procedures of Tier 2. Beginning
January 1, 2011, any former qualified participant or health benefit
dependent who is eligible to elect health insurance coverage under
this section and who previously elected coverage under a different
plan than the plan authorized under section 20d may either elect
coverage under this section or may at his or her own cost
participate in coverage under a different plan than the plan
authorized under section 20d.
(7) If the department of technology, management, and budget
receives notification from the United States internal revenue
service that this section or any portion of this section will cause
the retirement system to be disqualified for tax purposes under the
internal revenue code, then the portion that will cause the
disqualification does not apply.
(8) Any former qualified participant who otherwise met the
benefit commencement age and service requirements for receiving
health insurance coverage under section 20d and his or her health
benefit dependents who are excluded from state subsidized dental or
vision insurance coverage premiums provided by this section or
section 20d may participate in that dental or vision insurance
coverage in the manner prescribed by the retirement system at his
or her own cost.
(9) As used in this section, "health insurance coverage" means
the hospitalization and medical insurance, dental coverage, vision
coverage, and any other health care insurance provided in section
20d.
(10) This section shall not apply to an individual who has
reached the maximum amount of earned service for purposes of
calculation of a retirement allowance pursuant to section 20i.
Sec.
68c. (1) Except as otherwise provided in this subsection
section, a retirant who is receiving a retirement allowance under
this
act and is employed by this state beginning on or after the
effective
date of this section October
1, 2007 agrees to forfeit
his or her right to receive that retirement allowance during this
period of state employment. The retirement system shall cease
payment of the retirement allowance to a retirant described in this
subsection during this period of state employment and shall
reinstate payment of the retirement allowance without recalculation
when the period of state employment ceases. This subsection does
not
apply to a retirant who is employed by this state on the day
before
the effective date of this section September
30, 2007 so
long
as he or she remains in the position held by the retirant on
the
day before the effective date of this section September 30,
2007. As used in this subsection, "employed by this state" means
employed directly by this state as an employee or indirectly by
this state through a contractual arrangement with other parties.
(2) A member may retire under this act and not have his or her
retirement allowance forfeited under subsection (1), if the member
satisfies all of the following:
(a) Had at least 1,040 hours of service credit with the state
for each of the 5 years preceding termination.
(b) Terminated state service on or after July 1, 2010.
(c) At the time of termination was at least 60 years of age
and met the service requirement to receive a retirement allowance
under this act.
(d) Agrees to accept a postretirement option position with the
state prior to terminating state service with a work schedule that
meets all of the following requirements:
(i) Has a reduction of at least 50% from the hours reportable
for retirement in the previous fiscal year.
(ii) Permits no more than 1,040 hours of service credit in a
12-month period.
(iii) Commences no later than 2 weeks following termination of
state service.
(3) The appointing authority and the state budget director
must approve and shall jointly have the sole discretion to
determine if, and the extent to which, a postretirement option
position under this section will be made available to a terminating
member or retirant.
(4) Postretirement option employment shall be for an initial
period not to exceed 1 year. At the end of the initial and any
subsequent period, the appointing authority and the state budget
office jointly have the sole discretion to determine if the offer
of a postretirement option position will be renewed, renewed with
modifications, or terminated. Postretirement option positions may
be renewed for up to 1 year at a time, but not to exceed a total of
3 years. A retirant shall not be employed in a postretirement
option position, or a combination of postretirement option
positions, for a total of more than 3 years.
(5) A retirant will not earn any service credit or be a
qualified participant in Tier 2 under this act while employed in a
postretirement option position. No change to a retirant's
retirement allowance shall be made on account of employment in a
postretirement option position.
(6) (2)
A hospital, medical-surgical, and
sick care benefits
plan, dental plan, vision plan, and hearing plan that covers
retirants, retirant allowance beneficiaries, former qualified
participants, and health benefit dependents under this act shall
contain a coordination of benefits provision that provides all of
the following:
(a) If the person covered under any of the plans is also
eligible for medicare, then the benefits under medicare shall be
determined before the health insurance benefits under this act.
(b) If a person covered under any of the plans provided by
this act is also covered under another plan that contains a
coordination of benefits provision, the benefits shall be
coordinated as provided in 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 act 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 provided pursuant to
this act.
(7) If the department of technology, management, and budget
receives notification from the United States internal revenue
service that this section or any portion of this section will cause
the retirement system to be disqualified for tax purposes under the
internal revenue code, then the portion that will cause the
disqualification does not apply.
Sec. 68d. (1) There is appropriated for the fiscal year ending
September 30, 2010, $1,600,000.00 to the office of retirement
services in the department of technology, management, and budget
for administration of the changes under the amendatory act that
added this section.
(2) The appropriation authorized in subsection (1) is a work
project appropriation, and any unencumbered or unallotted funds are
carried forward into the following fiscal year. The following is in
compliance with section 451a(1) of the management and budget act,
1984 PA 431, MCL 18.1451a:
(a) The purpose of the project is to administer changes under
the amendatory act that added this section.
(b) The work project will be accomplished through a plan
utilizing interagency agreements, employees, and contracts.
(c) The total estimated completion cost of the work project is
$1,600,000.00.
(d) The estimated completion date for the work project is
September 30, 2011.