HOUSE BILL No. 4369 February 25, 1997, Introduced by Reps. Brewer, McBryde, Kaza, Martinez, Goschka, Dobb, Lowe, Frank, Brackenridge, Cherry, Gilmer and DeHart and referred to the Committee on Public Retirement. A bill to amend 1851 PA 156, entitled "An act to define the powers and duties of the county boards of commissioners of the several counties, and to confer upon them certain local, administrative and legislative powers; and to pre- scribe penalties for the violation of the provisions of this act," by amending section 12a (MCL 46.12a), as amended by 1996 PA 390. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 12a. (1) A county board of commissioners at a lawfully 2 held meeting may do 1 or more of the following: 3 (a) Provide group life, health, accident and hospitaliza- 4 tion, and disability coverage for a county employee, retired 5 employee, or an employee of an office, board, or department of 6 the county, including the board of county road commissioners, and 7 a dependent of an employee, either with or without cost 8 participation by the employee, and appropriate the necessary 9 funds for the insurance. For a county with 100 employees or 00544'97 KKR 2 1 more, self-insure for health, accident and hospitalization, and 2 group disability coverage for a county employee, retired employ- 3 ee, or an employee of an office, board, or department of the 4 county, including the board of county road commissioners, and a 5 dependent of an employee, either with or without cost participa- 6 tion by the employee, and appropriate the necessary funds. 7 (b) Adopt and establish a plan by which the county purchases 8 or participates in the cost of an endowment policy or retirement 9 annuity for a county employee or an employee of an office, board, 10 or department of the county, including the board of county road 11 commissioners, to provide monthly pension or retirement benefits 12 for each employee 60 years of age or older in an amount not to 13 exceed $150.00 per month or 2% of the average monthly earnings of 14 the employee for 5 years immediately before retirement times the 15 years of service of the employee, whichever is the lesser sum. 16 As an option, a county board of commissioners may adopt and 17 establish a plan by which the county pays pension or retirement 18 benefits to a county employee or an employee of an office, board, 19 or department of the county, including the board of county road 20 commissioners, who has been employed for not less than 25 years, 21 or who is 60 years of age or older and has been employed for not 22 less than 5 years, in monthly payments not to exceed 2.5% of the 23 employee's highest average monthly compensation or earnings 24 received from the county or county road fund for 5 years of serv- 25 ice times the total number of years of service of the employee, 26 including a fraction of a year, not to exceed 3/4 of the average 27 final compensation of the employee. A plan may also pay early 00544'97 3 1 retirement benefits at 55 years of age or older to the extent of 2 actuarially equivalent benefits not increasing the costs of the 3 plan. Except as provided in subsection (28), endowment policies, 4 retirement benefits, pensions, or annuity retirement benefits in 5 excess of the amounts stipulated in this subdivision may be pro- 6 vided for by a plan of employee participation to cover the cost 7 of the excess. If the employment or the pension or retirement 8 benefits of an employee who participated in the cost of pension 9 or retirement benefits are terminated before the employee 10 receives pension or retirement benefits equal to the total amount 11 of the employee's participation, the balance of the total partic- 12 ipation shall be refunded to the employee at the time of termina- 13 tion, if living, or if deceased, to the employee's heir, estate, 14 legal representative, or designated beneficiary as provided in 15 the plan adopted and established by the county board of 16 commissioners. If a terminated employee is subsequently rehired 17 by the county, the employee may repay the amount of participation 18 refunded to the employee upon the employee's termination, 19 together with compound interest from the date of refund to the 20 dates of repayment at the rates provided in the plan. As condi- 21 tions for repayment, the plan may require return to employment 22 for a period not to exceed 3 years and may require that repayment 23 be completed within a period of not less than 1 year following 24 return to employment. A plan adopted for the payment of retire- 25 ment benefits or a pension shall grant benefits to an employee 26 eligible for pension or retirement benefits according to a 27 uniform scale for all persons in the same general class or 00544'97 4 1 classification. An employee shall not be denied benefits by 2 termination of his or her employment after the employee becomes 3 eligible for benefits under the plan and this section. An endow- 4 ment policy or annuity purchased pursuant to this section shall 5 be purchased from an insurer authorized to write endowment poli- 6 cies or annuities in this state. 7 (2) In a plan adopted under this section, at least 60% of 8 the total pension or retirement benefit granted to an employee 9 from county funds shall consist of a percentage not to exceed 10 2.5% of the employee's average final compensation times the 11 employee's years of service and shall be granted to each employee 12 eligible for retirement under the plan uniformly and without 13 restriction or limitation other than those prescribed in this 14 section. As used in this section: 15 (a) "Average final compensation" means the annual average of 16 the highest actual compensation received by a county employee, 17 other than a county employee who is a judge of a municipal court 18 of record subject to subsection (21) or a judge subject to sub- 19 section (24), during a period of 5 consecutive years of service 20 contained within the employee's 10 years of service immediately 21 before the employee's retirement or a period of 5 years of serv- 22 ice as specified in the plan. In a county that adopts a plan for 23 granting longevity pay, the county board of commissioners may 24 exclude this longevity pay from average final compensation for 25 the purpose of computing the rate of employee contribution and 26 the amount of benefits payable to an employee upon retirement. 00544'97 5 1 (b) "Longevity pay" means increments of compensation payable 2 at annual or semiannual intervals and based upon years of service 3 to the county, exclusive of compensation provided for a given 4 class of positions. 5 (3) A circuit court stenographer is eligible for membership 6 in, and the benefits of, a pension or retirement benefit under a 7 plan established pursuant to this section, or a social security 8 plan established by the county or 1 of the counties that pays a 9 portion of the compensation of a circuit court stenographer. 10 (4) If the employment of a county employee eligible to 11 receive a pension or retirement benefit under a plan established 12 pursuant to this section is terminated after the employee has 13 completed 8 or more years of service in county employment, the 14 employee shall receive the amount of pension or retirement bene- 15 fit to which the employee's service would have entitled the 16 employee under the plan established, if the employee waives the 17 employee's right to a refund of the employee's total participa- 18 tion upon the termination of employment. The payment of pension 19 or retirement benefits shall begin, as provided in the plan, 20 after the employee would have become eligible for retirement 21 under the plan had the employee's employment not been terminated, 22 but not later than 90 days after the employee becomes 65 years of 23 age. The payment of pension or retirement benefits shall not 24 begin until the employee has applied for pension or retirement 25 benefits in the manner prescribed in the plan established. 26 (5) A plan established under this section may provide for 27 pension or retirement benefits for a county employee who becomes 00544'97 6 1 totally disabled for work in the county service from any cause, 2 after not less than 10 years of county employment, to the extent 3 of the limitations provided in this section. A plan may also 4 provide for pension or retirement benefits to the extent of the 5 limitations provided in this section or $400.00 per month, which- 6 ever is the greater sum, for an employee who becomes totally dis- 7 abled for work in the county service from causes that are the 8 direct and proximate result of county employment, to continue for 9 the duration of the disability or until the employee becomes eli- 10 gible for retirement pursuant to other provisions of the plan 11 authorized by this section. A plan may also provide for pension 12 or retirement benefits, to the extent of the limitations provided 13 in this section, for the actual dependents of a county employee 14 who dies while still employed by the county after not less than 15 10 years of county employment, or who dies after leaving county 16 employment with not less than the number of years of service 17 required to vest in the plan but before becoming eligible to 18 receive a pension or retirement benefit. A plan may also provide 19 for pension or retirement benefits to the extent of the limita- 20 tions provided in this section or $400.00 per month, whichever is 21 greater, for the actual dependents of a deceased county employee 22 whose death is the direct and proximate result of county 23 employment. The plan may provide that the period from the end of 24 the deceased or disabled employee's period of service to the date 25 that employee would have become eligible for retirement be used 26 as service for the sole purpose of computing the amount of 27 disability or death pension. 00544'97 7 1 (6) As used in this section, "county employee" includes a 2 bailiff of the district court in the thirty-sixth district who 3 serves pursuant to section 8322 of the revised judicature act of 4 1961,Act No. 236 of the Public Acts of 1961, being section5600.8322 of the Michigan Compiled Laws1961 PA 236, MCL 6 600.8322, and a person who receives more than 50% of all compen- 7 sation for personal services, rendered to governmental units, 8 from a county fund or county road fund, except a person, other 9 than a bailiff of the district court in the thirty-sixth dis- 10 trict, engaged for special services on a contract or fee basis. 11 Until December 31, 1979, a plan adopted under this section may 12 include as a county employee a person on leave of absence from 13 county employment who is not a member of another retirement 14 system except as a retirant and who pays or arranges payment of 15 contributions equal to the contributions that would have been 16 required to be paid under the plan by both the county and the 17 employee, based upon the compensation the employee would have 18 received from the county, if the employee had not taken a leave 19 of absence or a person who complies with the requirements of such 20 a provision approved for inclusion in a plan by the county board 21 of commissioners before January 1, 1976, who shall be considered 22 to be a county employee during the period of compliance. A plan 23 adopted under this section may exclude a person who is employed 24 on a temporary basis and a person employed in a position normally 25 requiring less than 1,000 hours, or some lesser specified number 26 of hours, work per year. A bailiff serving in the district court 27 in the thirty-sixth district is eligible to re