HOUSE BILL No. 5723 February 21, 2002, Introduced by Rep. Frank and referred to the Committee on Senior Health, Security and Retirement. A bill to amend 1980 PA 300, entitled "The public school employees retirement act of 1979," by amending section 43a (MCL 38.1343a), as amended by 1990 PA 298. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 43a. (1) The contributions of a member who contributes 2 to the member investment plan shall be deducted by the employer 3 and remitted as employer contributions to the retirement system 4 pursuant to section 42. A member who contributes to the member 5 investment plan is entitled to the benefits provided in sections 6 43b and 43c. 7 (2) Until December 31, 1989, a member who first became a 8 member on or before December 31, 1989, and who elected or elects 9 on or before December 31, 1989 to contribute to the member 10 investment plan shall contribute 4% of the member's compensation 05825'01 MRM 2 1 to the member investment plan and beginning January 1, 1990 shall 2 contribute 3.9% of the member's compensation to the member 3 investment plan. 4 (3) On or before January 1, 1993, a member who first became 5 a member on or before December 31, 1989, except as otherwise pro- 6 vided in subsection (4), and who did not elect to make contribu- 7 tions to the member investment plan, may irrevocably elect to 8 make the contributions described in subsection (2). In addition 9 to making the contributions required under subsection (2), a 10 member who elects to make contributions to the member investment 11 plan under this subsection shall make a contribution of 4% of the 12 compensation received on or after January 1, 1987 to December 31, 13 1989, and 3.9% of the compensation received on or after January 14 1, 1990 to the date of the election, plus an amount equal to the 15 compound interest that would have accumulated on those contribu- 16 tions as described in section 33, plus an amount equal to the net 17 actuarial cost of the additional benefits attributable to service 18 credited before January 1, 1987, as determined by the retirement 19 board. The method and timing of payment by a member under this 20 subsection shall be determined by the retirement board. The con- 21 tributions made under this subsection shall be deposited into the 22 reserve for employee contributions. This subsection shall not 23 apply until the department receives notification from the United 24 States internal revenue service that this subsection will not 25 cause the retirement system not to be qualified for tax purposes 26 under the internal revenue code. 05825'01 3 1 (4) Except as otherwise provided in subsection (8), a member 2 who first became a member on or before December 31, 1986 but did 3 not perform membership service between December 31, 1986 and 4 January 1, 1990, and who returns to membership service on or 5 after January 1, 1990 shall make the contributions described in 6 subsection (7). 7 (5) Except as otherwise provided in subsection (8), a member 8 who first became a member on or after January 1, 1990 shall make 9 the contributions described in subsection (7). 10 (6) A member who first became a member on or after 11 January 1, 1987 but before January 1, 1990 shall have 30 days 12 from his or her first date of employment to irrevocably elect to 13 make the contributions described in subsection (2). 14 (7) Except as otherwise provided in subsection (8), a member 15 who first became a member on or after January 1, 1990 shall con- 16 tribute the following amounts to the member investment plan: 17 18 Member's annual school fiscal Amount payable to the 19 year earned compensation member investment plan 20 Not over $5,000.00 3% of member's compensation 21 Over $5,000.00 but not $150.00, plus 3.6% of the excess 22 over $15,000.00 over $5,000.00 23 Over $15,000.00 $510.00, plus 4.3% of the excess 24 over $15,000.00 25 (8) A member who contributes to the member investment plan 26 pursuant to subsection (4) or (5) may irrevocably elect to 27 discontinue contributions to the member investment plan as 05825'01 4 1 provided in this subsection. The member may not elect to 2 discontinue contributions to the member investment plan until the 3 expiration of 3 school fiscal years following the date he or she 4 first contributes to the member investment plan or after the 5 expiration of 4 school fiscal years following the date he or she 6 first contributed to the member investment plan. A member who 7 pursuant to this subsection makes an election to discontinue con- 8 tributions to the member investment plan shall receive a refund 9 of those contributions plus interest, as determined by the 10 retirement board, payable before the expiration of 6 months after 11 the date of notification by the reporting unit. A member who 12 elects to discontinue making contributions pursuant to this sub- 13 section is not entitled to the benefits provided in sections 43b 14 and 43c. A member who contributes to the member investment plan 15 shall be given advance written notice of his or her opportunity 16 to elect to discontinue contributions to the member investment 17 plan pursuant to this subsection in a manner prescribed by the 18 retirement board. This subsection shall not apply until the 19 department receives notification from the United States internal 20 revenue service that this subsection will not cause the retire- 21 ment system not to be qualified for tax purposes under the inter- 22 nal revenue code. 23 (9) A MEMBER WHO FIRST BECAME A MEMBER ON OR BEFORE JANUARY 24 1, 1990 AND WHO IRREVOCABLY ELECTED NOT TO CONTRIBUTE TO THE 25 MEMBER INVESTMENT PLAN SHALL HAVE 180 DAYS FROM THE EFFECTIVE 26 DATE OF THE AMENDATORY ACT THAT ADDED THIS SUBSECTION TO MAKE THE 27 CONTRIBUTIONS REQUIRED UNDER SUBSECTION (2) AND ANY ADDITIONAL 05825'01 5 1 CONTRIBUTIONS THAT THE RETIREMENT BOARD DEEMS NECESSARY. THE 2 RETIREMENT BOARD SHALL DETERMINE THE METHOD AND TIMING OF PAYMENT 3 BY A MEMBER UNDER THIS SUBSECTION. 4 (10)(9)This section and sections 43b and 43c shall not 5 apply until the department receives notification from the United 6 States internal revenue service that contributions under this 7 section picked up by the employer pursuant to section 42 shall 8 not be included as gross income of the member until they are dis- 9 tributed or made available to the member, retirant, retirement 10 allowance beneficiary, or refund beneficiary. 05825'01 Final page. MRM