December 12, 2013, Introduced by Senator HUNE and referred to the Committee on Appropriations.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending sections 69, 69c, 69f, 70, 71, 75, and 76 (MCL 38.1369,
38.1369c, 38.1369f, 38.1370, 38.1371, 38.1375, and 38.1376),
sections 69, 69c, and 70 as amended and section 69f as added by
1989 PA 194, section 71 as amended by 1996 PA 268, section 75 as
amended by 2006 PA 617, and section 76 as added by 1985 PA 91.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
69. (1) As Until June 30,
2014, as a condition for
granting membership or prior service credit under this act for out
of
system public education service, a member shall pay meet both of
the following requirements:
(a) 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 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
(b) Have 5 years of reporting unit service credit under this
act
or former Act No. 136 of the Public Acts of 1945 PA 136,
following the out of system public education service.
(2)
A Until June 30, 2014, a member shall not be is entitled
to a retirement allowance based on out of system public education
service
that was performed after July 1, 1974, until if the
member
pays
meets both of the following
requirements:
(a) 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
(b) That service is followed by 5 years of reporting unit
service credit under this act.
(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 is
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 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 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 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 under this section 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.
(8) Beginning July 1, 2014, a member is not eligible to
purchase service under this section.
Sec.
69c. (1) A Until June 30,
2014, 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. 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 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 PA 136.
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.
(6) Beginning July 1, 2014, a member is not eligible to
purchase service under this section.
(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 Until June 30,
2014, 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, and 69c(2), 69d, 69e,
74a,
74b,
77, and 78, or former
sections 69a, 69b, 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 shall 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 described
in
section 81(1)(a) for a retirement allowance paid prior to before
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) Beginning July 1, 2014, a member is not eligible to
purchase service under this section.
Sec.
70. (1) As Until June 30,
2014, as a condition for
granting membership or prior service credit under this act for
state
of Michigan service, a member shall pay meet both of the
following requirements:
(a) Pay to the retirement system an amount equal to the amount
the member would have contributed under the contributory plan for
service performed before July 1, 1977 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 PA 136,
together with regular
interest from the end of the school fiscal year in which the
service was performed to the semiannual anniversary of the date
following
payment. , and shall relinquish
(b) Relinquish all rights to retirement under the state
employees'
retirement act, Act No. 240 of the Public Acts of 1943,
as
amended, being sections 38.1 to 38.47 of the Michigan Compiled
Laws.
A 1943 PA 240, MCL 38.1 to
38.69. Until June 30, 2014, a
member
shall not is entitled to receive benefits pursuant to under
sections 43b and 43c for service performed on or after January 1,
1987
until if the member pays the difference between the actuarial
equivalent of the benefits provided by sections 43b and 43c and by
the
state employees' retirement act, Act No. 240 of the Public Acts
of
1943.1943 PA 240, MCL 38.1 to
38.69.
(2) Credit for service performed as a state employee under the
state
employees' retirement act, Act No. 240 of the Public Acts of
1943,
as amended, 1943 PA 240, MCL
38.1 to 38.69, shall be on the
same basis for eligibility in all respects, for any form of
retirement provided in this act as if the service were performed in
a reporting unit under this act.
(3)
A Until June 30, 2014, a former member who on or before
July 1, 1974, was employed in the state classified or unclassified
service, whose membership was transferred to the state employees'
retirement
system under the state employees' retirement act, Act
No.
240 of the Public Acts of 1943, as amended, 1943 PA 240, MCL
38.1 to 38.69, and who again became a member of the retirement
system
created under former Act No. 136 of the Public Acts of 1945
PA 136 or becomes a member of the retirement system created under
this
act, shall be is entitled to petition the retirement system in
writing for a transfer of the member's accumulated contributions,
including interest, and service standing to the member's credit
with the state employees' retirement system to this retirement
system. Upon receipt of the member's petition, service standing to
the member's credit, accumulated contributions, and interest shall
be transferred from the employee's savings fund created under the
state
employees' retirement act, Act No. 240 of the Public Acts of
1943,
as amended, 1943 PA 240, MCL
38.1 to 38.69, to the reserve
for employee contributions of this retirement system. A person
whose membership service and accumulated contributions are
transferred back to this retirement system immediately shall have
the transferred service credit recognized by the retirement system
on the same basis as if the person continuously had been a member
of the retirement system.
(4)
If Until June 30, 2014, if
a member who made payment for
state of Michigan service dies and a retirement allowance
beneficiary has not been designated, or 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) Beginning July 1, 2014, a member is not eligible to
purchase service under this section.
Sec.
71. (1) The Until June 30,
2014, the retirement board
shall grant service credit for the time a member is on a sabbatical
leave authorized by a reporting unit, if the member returns to
regular employment with the same reporting unit and acquires 1 year
or more of subsequent service credit with that same reporting unit
and if the member acquired 5 or more years of credited service with
the reporting unit immediately before the sabbatical leave.
(2)
If the sabbatical leave described in subsection (1) is
granted
before July 1, 1981, the reporting unit, if the reporting
unit
had a noncontributory plan at the time the sabbatical leave is
granted,
or the member, if the reporting unit has a contributory
plan
at the time the sabbatical leave is granted, shall pay to the
system
for each year of sabbatical leave credit an amount equal to
5%
of the member's compensation earned in the school fiscal year
immediately
before the school fiscal year in which the sabbatical
leave
is granted, together with regular interest from the end of
the
school fiscal year in which the sabbatical leave was or is
granted
to the earlier of the following dates following the date of
payment,
the first day of the school fiscal year beginning after
the
date of payment or the first day of the seventh month of the
school
fiscal year in which the payment is made. If the reporting
unit
makes the payment required by this subsection, the reporting
unit
also shall pay the required interest. If the member makes the
payment
required by this subsection, the member also shall pay the
required
interest.
(2) (3)
If the sabbatical leave described
in subsection (1) is
granted after June 30, 1981, the member shall pay an amount equal
to 5% of the member's full-time or equated full-time compensation
earned in the school fiscal year immediately before the school
fiscal year in which payment is made for each year of service
credit the member elects to purchase. In computing payment under
this subsection, the compensation amount used, except as otherwise
provided in this subsection, shall not be less than the highest
school fiscal year compensation the member earned from the
reporting unit that granted the sabbatical leave. If the
compensation amount used for computing payment under this
subsection exceeds the member's final average compensation
determined at the time of retirement, the payment required under
this subsection shall be recomputed using the member's final
average compensation and a refund shall be made based upon the
recomputation.
(4)
If, before October 31, 1980, either the reporting unit or
the
member has contributed 5% of the member's compensation for the
school
fiscal year in which the sabbatical leave was granted in
order
to purchase service credit for that sabbatical leave, a
further
payment for the purchase of service credit for that
sabbatical
leave shall not be required. If a member has paid the
amount
required under subsection (2) for the purchase of service
credit
for sabbatical leave, but later receives a refund of that
amount,
the member, not the reporting unit, shall repay the amount
with
regular interest as required by subsection (2) if the member
elects
to purchase service credit for the sabbatical leave.
(3) (5)
Effective October 1, 1981, Until
June 30, 2014, the
retirement board shall grant service credit for the time a member
is on either an employee organization professional services leave
or employee organization professional services released time
authorized by a reporting unit if all of the following conditions
are satisfied, as applicable:
(a) For a member who is on either a professional services
leave or professional services released time that first began
before October 1, 1996, which leave or released time is renewed
annually by the reporting unit, the member is included on the
reporting unit's reports required by section 42(6) and
compensation, service, contribution, and other requirements are
reported on the same basis as for those members of the reporting
unit who were not granted an employee organization professional
services leave or employee organization professional services
released time.
(b) For a member who is on either a professional services
leave or professional services released time, which leave or
released time does not meet the requirements of subdivision (a),
the member is included on the reporting unit's reports in the
manner required by subdivision (a), except that compensation is
reported at the rate of compensation paid to the member by the
reporting unit immediately preceding the date the member commenced
the professional services leave or professional services released
time along with the normal and customary compensation increases
that would have been paid to the member by the reporting unit had
the member remained in the same position held at the reporting unit
immediately preceding the date the member commenced the leave or
released time. However, if the member was not working a full 12-
month period for the reporting unit immediately preceding the date
the member commenced the professional services leave or
professional services released time and is working a full 12-month
period for the public school employee organization, the rate of
compensation paid to the member by the reporting unit immediately
preceding the date the member commenced the leave or released time
may be increased proportionately to reflect the additional time
worked for the public school employee organization. That adjusted
compensation, along with the normal and customary compensation
increases otherwise allowed in this subdivision, shall then be
reported as required in this subdivision.
(c) For a member who is on either a professional services
leave or professional services released time that first began
before October 1, 1996, which leave or released time is renewed
annually by the reporting unit, the reporting unit remits the
amount required by section 42 and the percentage of aggregate
annual compensation provided from the state school aid fund for
current service, if any, the percentage determined for unfunded
accrued service as required by section 41, and the employer's share
of social security contributions if the reporting unit is
responsible for remitting the employee's share of social security
contributions.
(d) For a member who is on either a professional services
leave or professional services released time, which professional
services leave or professional services released time does not meet
the requirements of subdivision (c), the reporting unit remits the
amounts required by subdivision (c) based upon the rate of
compensation paid to the member by the reporting unit immediately
preceding the date the member commenced the professional services
leave or professional services released time along with the normal
and customary compensation increases that would have been paid to
the member by the reporting unit had the member remained in the
same position held at the reporting unit immediately preceding the
date the member commenced the leave or released time. However, if
the member was not working a full 12-month period for the reporting
unit immediately preceding the date the member commenced the
professional services leave or professional services released time
and is working a full 12-month period for the public school
employee organization, the rate of compensation paid to the member
by the reporting unit immediately preceding the date the member
commenced the leave or released time may be increased
proportionately to reflect the additional time worked for the
public school employee organization. That adjusted compensation,
along with the normal and customary compensation increases
otherwise allowed in this subdivision, shall then be reported as
required in this subdivision.
(4) (6)
The reporting unit shall be
reimbursed those sums paid
to
the retirement board pursuant to under subsection (5) (3) by
the
member or the public school employee organization on a current
basis. A member who has credited service as an employee of a school
district of the first class, as described in part 6 of the revised
school
code, Act No. 451 of the Public Acts of 1976, being sections
380.401
to 380.485 of the Michigan Compiled Laws, 1976 PA 451, MCL
380.401 to 380.485, for a leave of absence effective before October
1, 1981, shall continue to receive credit based upon the provisions
of the law of this state in effect at the time the leave of absence
was initially effective.
(5) Beginning July 1, 2014, a member is not eligible to
purchase service under this section.
Sec.
75. (1) A Until June 30,
2014, a member who left or
leaves service as a public school employee; who left or leaves out-
of-system public education service; or a member of the state
employees' retirement system under section 13 of the state
employees' retirement act, 1943 PA 240, MCL 38.13, who left or
leaves service as a state employee for purposes of parental leave
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 was claimed may purchase service
credit for the time period or periods during which the person was
separated from service because of parental leave if the member
satisfies the requirements of this section. The member shall submit
an application as described in subsection (5) and shall pay the
actuarial cost to the retirement system. 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
retirement system the purpose for which the member took leave or
was separated from service as a public school employee; a person
performing out-of-system public education service; or a member of
the state employees' retirement system under section 13 of the
state employees' retirement act, 1943 PA 240, MCL 38.13.
(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) 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 parental leave or a person who reduces hours
of out of system public education service for purposes of parental
leave 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) A member requesting purchase of service credit under this
section shall submit an application as prescribed by the retirement
system in which the member shall certify the time period claimed
for parental leave and the purpose of the parental leave. If the
request for purchase of service credit under this section is a
result of leave taken to care for the member's child by birth or
adoption, then the member also shall submit a certified copy of a
birth certificate or adoption document from the appropriate court
of jurisdiction.
(6) Parental leave is creditable under this act until the
child, by birth or adoption, attains age 18 or is married,
whichever occurs first.
(7) Beginning July 1, 2014, a member is not eligible to
purchase service under this section.
(8) (7)
As used in this section,
"parental leave" means either
of the following:
(a) The presence of the member in the active participation or
supervision in the day-to-day, ongoing care or maintenance of his
or her child by birth or adoption, for which the member reduced or
eliminated the number of hours worked for the state, in out-of-
system public education service, or for the reporting unit in a
normal work time period.
(b) A member's pregnancy that occurred while a member, whether
brought to full term or not, childbirth, and recuperation, for
which the member reduced or eliminated the number of hours worked
for the state, in out-of-system public education service, or for
the reporting unit in a normal work time period.
Sec.
76. (1) On and after the effective date of this section,
Until June 30, 2014, a member who is otherwise entitled to purchase
service
credit for active duty in the armed forces under section 73
or
74, or for maternity or paternity
or child rearing under section
75 , may purchase such the service
credit in separate increments
equal to 1 or more full years, or a remaining fraction of a year,
if any, or both. Partial purchase of service credit under this
section
shall subsection does not bar future such purchases
otherwise
in compliance with this section subsection
and sections
73,
74, and section 75, but computation of the amount of payment
due shall be made separately for each purchase. Beginning July 1,
2014, a member is not eligible to purchase service under this
subsection.
(2) A member who is otherwise entitled to purchase service
credit for active duty in the armed forces under section 73 or 74
may purchase the service credit in separate increments equal to 1
or more full years, or a remaining fraction of a year, if any, or
both. Partial purchase of service credit under this subsection does
not bar future purchases otherwise in compliance with this
subsection and sections 73 and 74, but computation of the amount of
payment due shall be made separately for each purchase.