MEMBERS & RETIRANTS ON RETIREMENT BOARDS

Senate Bill 1189

Sponsor:  Sen. Mark Jansen

House Committee:  Oversight, Reform, and Ethics

Senate Committee:  Appropriations                                      (Enacted as Public Act 492 of 2012)

Complete to 11-26-12

A SUMMARY OF SENATE BILL 1189 AS PASSED BY THE SENATE 6-14-12

Senate Bill 1189 would add Section 8a to the Public Employee Retirement Benefit Protection Act (MCL 38.1688a) to require a "retirement system" that has both members (those still working) and retirants (those retired) who are eligible for election to the retirement system's governing board, to comply with the following:

·         The retirement system and the political subdivision sponsoring it would have to ensure equal treatment of all individuals elected to (or seeking election to) the governing board.

·         The retirement system or the political subdivision sponsoring it could not require a retirant who is elected (or who seeks election) to the board to meet more stringent or additional requirements to serve, be elected, or participate in the election process than a member elected or seeking election to the retirement board.

·         If the retirement system or the political subdivision sponsoring it compensates a member who is elected to the governing board, then they would have to compensate a retirant elected to the board at an amount at least equal to the least amount of compensation provided to a member elected to the board.

The bill would define "compensate" and "compensation" as any form of remuneration for performing duties as a member of the board, and would define "member of the governing board" as a trustee, commissioner, or other official member of the governing board vested with the general administration, management, and operation of the retirement system or other decision-making body responsible for the retirement system.

FISCAL IMPACT:

The bill could increase costs to public retirement systems to the extent that it requires them to equally compensate board members who are retirees of the retirement system if they provide compensation to board members who are members of the system.

                                                                                         Legislative Analyst:   J. Hunault

                                                                                                 Fiscal Analyst:   Bethany Wicksall

■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.