November 10, 2016, Introduced by Senator PAVLOV and referred to the Committee on Appropriations.
A bill to amend 1965 PA 314, entitled
"Public employee retirement system investment act,"
by amending section 20m (MCL 38.1140m), as amended by 2014 PA 185.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 20m. (1) The governing board vested with the general
administration, management, and operation of a system or other
decision-making body that is responsible for implementation and
supervision of any system shall confirm in the annual actuarial
valuation required under section 20h and the summary annual report
required under section 13 that each system under this act provides
for the payment of the required employer contribution as provided
in this section and shall confirm in the summary annual report that
the system has received the required employer contribution for the
year covered in the summary annual report. The required employer
contribution is the actuarially determined contribution amount. An
annual required employer contribution in a system under this act
shall
must consist of a current service cost payment and a
payment
of at least the annual accrued amortized interest on any unfunded
actuarial liability and the payment of the annual accrued amortized
portion of the unfunded principal liability.
(2) For fiscal years that begin before January 1, 2006, the
required
employer contribution shall must
not be determined using
an amortization period greater than 40 years. Except as otherwise
provided in this section, for fiscal years that begin after
December
31, 2005, the required employer contribution shall must
not be determined using an amortization period greater than 30
years. For the Tier 1 retirement plan under the Michigan public
school employees' retirement system, created under the public
school employees retirement act of 1979, 1980 PA 300, MCL 38.1301
to 38.1437, for fiscal years that begin after December 31, 2016,
the required employer contribution must be determined using the
amortization period provided in section 41 of the public school
employees retirement act of 1979, 1980 PA 300, MCL 38.1341. For the
Tier 1 retirement plan under the state employees' retirement
system, created under the state employees' retirement act, 1943 PA
240, MCL 38.1 to 38.69; the Michigan public school employees'
retirement system created under the public school employees
retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1437; and
the Michigan state police retirement system created under the state
police retirement act of 1986, 1986 PA 182, MCL 38.1601 to 38.1648,
only,
for the fiscal year beginning
October 1, 2006, the
contribution
for the unfunded actuarial accrued liability shall
must be equal to the product of the assumed real rate of investment
return times the unfunded actuarial accrued liability. In a plan
year, any current service cost payment may be offset by a credit
for amortization of accrued assets, if any, in excess of actuarial
accrued liability. A required employer contribution for a system
administered
under this act shall must allocate the actuarial
present value of future plan benefits between the current service
costs to be paid in the future and the actuarial accrued liability.
(3) The governing board vested with the general
administration, management, and operation of a system or other
decision-making body that is responsible for implementation and
supervision of a system shall act upon the recommendation of an
actuary and the board and the actuary shall take into account the
standards
of practice of the actuarial standards board Actuarial
Standards
Board of the American academy Academy of
actuaries
Actuaries in making the determination of the required employer
contribution.
(4) (2)
Subsection Subsections (1) applies to (3) apply to a
large sponsored system except as otherwise provided in a plan for
adjustment.
As used in this subsection, "plan for adjustment" means
that
term as defined in section 13g.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 102 of the 98th Legislature is enacted into
law.