HOUSE BILL No. 6067


     September 16, 1998, Introduced by Rep. Gubow and referred to the Committee on Public Retirement.


        A bill to amend 1994 PA 350, entitled

   "Public employee retirement benefits forfeiture act,"

   by amending sections 2, 3, 4, and 5 (MCL 38.2702, 38.2703,

   38.2704, and 38.2705), sections 2, 4, and 5 as amended by 1996 PA

   467.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 2.  As used in this act:

 2         (a) "Felony arising out of his or her service as a public

 3    employee" means 1 or more of the following:

 4         (i) A felony resulting from the misuse of public funds.

 5         (ii) A felony resulting from the receipt of a bribe or other

 6    financial benefit in that person's capacity as a public

 7    employee.

 8         (b) "Member" means a member, vested former member, or

 9    deferred member of a retirement system.


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 1         (c) "Retirant" means a person who has retired with a

 2    retirement benefit payable from a retirement system.

 3         (d) "Retirement benefit" means an annuity, a retirement

 4    allowance, a pension, an optional benefit, a postretirement bene-

 5    fit INCLUDING BUT NOT LIMITED TO HEALTH BENEFITS, and any other

 6    right accrued or accruing to a member under a retirement system.

 7     Retirement benefit does not include health benefits provided to

 8     a retirant or his or her beneficiaries by a retirement system. 

 9         (e) "Retirement system" means a public employee retirement

10    system established by this state or a political subdivision of

11    this state.

12         Sec. 3.  A member or retirant who is convicted of or who

13    enters a nolo contendere plea accepted by a court for a felony

14    arising out of his or her service as a public employee is consid-

15    ered to have breached the public trust and  may  SHALL have his

16    or her rights to an otherwise vested retirement benefit and all

17    accumulated contributions standing to that person's credit in the

18    retirement system forfeited as provided in this act.  This act

19    applies only to the retirement system of which the person was a

20    member or retirant at the time the felony was committed and only

21    to the retirement system established by the entity affected by

22    the felony.

23         Sec. 4.  (1)  If  THE COURT HAVING JURISDICTION, WHEN PRO-

24    NOUNCING JUDGMENT AGAINST AND PASSING SENTENCE UPON, a member or

25    retirant WHO is convicted of or WHO enters a nolo contendere plea

26    accepted by the court for a felony arising out of his or her

27    service as a public employee,  the court may  SHALL order



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 1     forfeiture as provided in this section.  If a court orders

 2     forfeiture under this section, the order shall contain  all of

 3    the following:  , as applicable: 

 4         (a)  The portion of  THAT the member's or retirant's retire-

 5    ment benefit under a retirement system established by that

 6    person's employer at the time the act or acts that resulted in

 7    the felony were committed  that accrued to that member or retir-

 8     ant on or after the date the first act that resulted in the

 9     felony was committed  is forfeited.

10         (b)  The  THAT THE member's or retirant's accumulated con-

11    tributions standing to that person's credit in the individual

12    account established for that purpose in the retirement system

13     shall be refunded to the member or retirant  ARE FORFEITED.

14          (c) The retirement system shall pay to an individual, if

15     any, who would otherwise be a beneficiary of the member or retir-

16     ant whose retirement benefit is being forfeited under this act an

17     actuarially equivalent monthly retirement allowance at the age

18     that member or retirant would have become eligible for unreduced

19     retirement benefits under that retirement system.

20          (d) The retirement system shall provide hospitalization and

21     medical coverage insurance to the member or retirant whose

22     retirement benefit is being forfeited under this act and to his

23     or her beneficiaries in the same manner and under the same

24     restrictions as is provided to other retirants and beneficiaries

25     of that retirement system. 







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 1         (C) THAT THE RETIREMENT SYSTEM PAY NO OTHER AMOUNT FROM THE

 2    ASSETS OF THE RETIREMENT SYSTEM ON BEHALF OF THAT MEMBER OR

 3    RETIRANT.

 4         (2)  If a court enters an order described in subsection (1),

 5     the  THE clerk of the court shall deliver the order to the

 6    retirement system.

 7         Sec. 5.  (1) The retirement system shall comply with  an 

 8    THE order of the court described in section 4.  The retirement

 9    system shall not pay to a member or retirant whose retirement

10    benefit is forfeited under this act, OR A BENEFICIARY OF THAT

11    MEMBER OR RETIRANT, any retirement benefits on or after the day

12    the governing body of the retirement system receives the order of

13    the court under section 4.

14         (2) A retirement system shall comply with any subsequent

15    orders of a court based upon an appeal of an order previously

16    submitted to the retirement system under this act.

17         (3) A retirement system that complies with a court order

18    under this act is released and discharged from any and all

19    liability pertaining to retirement benefits arising on account of

20    the former member's or retirant's service to the employer upon

21    receipt of the order of the court under section 4.















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