SENATE BILL NO. 587


   May 6, 1999, Introduced by Senators BULLARD, DUNASKISS, 
        HAMMERSTROM and JOHNSON and referred to the Committee on 
        Local, Urban and State Affairs.



        A bill to provide for the creation of public employee health

   care funds; to provide for the administration of the funds; to

   authorize the investment of the assets of the funds; and to pre-

   scribe the powers and duties of investment fiduciaries and cer-

   tain public officers and employees.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 1.  This act shall be known and may be cited as the

 2    "public employee health care fund investment act".

 3         Sec. 2.  As used in this act:

 4         (a) "Fund" means a public employee health care fund created

 5    pursuant to this act.

 6         (b) "Investment fiduciary" means a person who does any of

 7    the following:

 8         (i) Exercises any discretionary authority or control in
             the

 9    investment of the fund's assets.


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 1         (ii) Renders investment advice for a fee or other direct
             or

 2    indirect compensation.

 3         (c) "Public corporation" means any county, city, village, or

 4    township in this state.

 5         (d) "Qualified person" means a person who is eligible to

 6    receive health care benefits and who is designated as a qualified

 7    person by the public corporation.

 8         Sec. 3.  The legislative body of a public corporation may

 9    adopt a resolution establishing a public employee health care

10    fund for the purpose of providing for the payment of health care

11    benefits to retirants and beneficiaries of retirants of the

12    public corporation.  The resolution shall include all of the

13    following:

14         (a) The designation of a person who shall act as the fund's

15    investment fiduciary.

16         (b) A restriction of withdrawals from the fund solely for

17    the payment of health care benefits on behalf of qualified per-

18    sons and the payment of the expenses of administration of the

19    fund.

20         (c) The designation of who is a qualified person for pur-

21    poses of payment of health care benefits from the fund.

22         (d) A determination of whether the fund will be established

23    on an actuarial basis.  If the fund is established on an actuar-

24    ial basis, and is subsequently determined to be overfunded by

25    110% or more, the amount of overfunding in excess of 110% may be

26    withdrawn at the option of the legislative body of the public





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 1    corporation that establishes the public employee health care

 2    fund.

 3         (e) Approval of an investment policy specifying permitted

 4    investments.

 5         Sec. 4.  The investment fiduciary shall invest the assets of

 6    the fund in accordance with the investment limitation provisions

 7    of sections 12 to 20e, 20j, and 20k of the public employee

 8    retirement system investment act, 1965 PA 314, MCL 38.1132 to

 9    38.1140e, 38.1140j, and 38.1140k.

10         Sec. 5.  The public corporation shall have an actuarial

11    review of the fund prepared at least every 5 years with assets

12    valued on a market related basis.  The investment fiduciary shall

13    prepare and issue a summary annual report to the legislative body

14    of the public corporation that established the fund.





























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