April 29, 2003, Introduced by Reps. Ehardt, Brandenburg, Robertson and Wojno 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 85 (MCL 38.1385), as amended by 2002 PA 94.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 85. (1) A retiring member or retiring deferred member
2 who meets the requirements of section 81 or 81a or a member whom
3 the retirement board finds to be totally and permanently disabled
4 and eligible to receive a retirement allowance under section 86
5 or 87 shall elect to receive his or her retirement allowance
6 under 1 of the payment options provided in this subsection. The
7 election shall be in writing and filed with the retirement board
8 at least 15 days before the effective date of the retirement
9 allowance except as provided for a disability retirant under
10 section 86 or 87. The amount of retirement allowance under
11 subdivision (b), (c), or (d) shall be the actuarial equivalent of
1 the amount of retirement allowance under subdivision (a). The
2 options are as follows:
3 (a) A retirant shall be paid a straight retirement allowance
4 for life computed pursuant to section 84. An additional
5 retirement allowance payment shall not be made upon the
6 retirant's death.
7 (b) A retirant shall be paid a reduced retirement allowance
8 for life with the provision that upon the retirant's death,
9 payment of the reduced retirement allowance is continued
10 throughout the lifetime of the retirement allowance beneficiary
11 whom the member or deferred member designates in a writing filed
12 with the retirement board at the time of election of this
13 option. A member or deferred member may elect this option and
14 designate a retirement allowance beneficiary under the conditions
15 set forth in section 82(2) or 89(3).
16 (c) A retirant shall be paid a reduced retirement allowance
17 for life with the provision that upon the retirant's death,
18 payment of 1/2 of the reduced retirement allowance is continued
19 throughout the lifetime of the retirement allowance beneficiary
20 whom the member designated in a writing filed with the retirement
21 board at the time of election of the option.
22 (d) On and after January 1, 2000, a retirant shall be paid a
23 reduced retirement allowance for life with the provision that
24 upon the retirant's death, payment of 75% of the reduced
25 retirement allowance is continued throughout the lifetime of the
26 retirement allowance beneficiary whom the member designated in a
27 writing filed with the retirement board at the time of election
1 of the option.
2 (2) In addition to the election under subsection (1), a
3 retirant, other than a disability retirant who is 60 years of age
4 or less, may elect to coordinate his or her retirement allowance
5 with an estimated primary social security benefit. The retirant
6 shall be paid an increased retirement allowance until 62 years of
7 age and a reduced retirement allowance after 62 years of age.
8 The increased retirement allowance paid until 62 years of age
9 shall approximate the sum of the reduced retirement allowance
10 payable after 62 years of age and the retirant's estimated social
11 security primary insurance amount. The estimated social security
12 primary insurance amount shall be determined by the retirement
13 system. The election under this subsection shall be made at the
14 same time and in the same manner as required under
15 subsection (1).
16 (3) Except as otherwise provided in this section, the
17 election of a payment option in subsections (1) and (2) shall not
18 be changed on or after the effective date of the retirement
19 allowance. Except as
provided in subsection (5) this section,
20 the retirement allowance beneficiary selected under
21 subsection (1)(b), (c), or (d) shall not be changed on or after
22 the effective date of the retirement allowance and shall be
23 either a spouse, brother, sister, parent, or child, including an
24 adopted child, of the member, deferred member, retiring member,
25 or retiring deferred member entitled to make the election under
26 this act. Another retirement allowance beneficiary shall not be
27 selected. If a member, deferred member, retiring member, or
1 retiring deferred member is married at the retirement allowance
2 effective date, an election under subsection (1), other than an
3 election under subsection (1)(b), (c), or (d) naming the spouse
4 as retirement allowance beneficiary, shall not be effective
5 unless the election is signed by the spouse, except that this
6 requirement may be waived by the board if the signature of a
7 spouse cannot be obtained because of extenuating circumstances.
8 For purposes of this subsection, "spouse" means the person to
9 whom the member, deferred member, retiring member, or retiring
10 deferred member is married at the retirement allowance effective
11 date. Payment to a retirement allowance beneficiary shall start
12 the first day of the month following the retirant's death.
13 (4) If Except
as otherwise provided in subsection (8), if
14 the retirement allowance beneficiary selected under
15 subsection (1)(b), (c), or (d) predeceases the retirant, the
16 retirant's benefit shall revert to a straight retirement
17 allowance including post-retirement adjustments, if any, shall be
18 effective the first of the month following the death, and shall
19 be paid during the remainder of the retirant's life. This
20 subsection applies to a retirant whose effective date of
21 retirement is after June 28, 1976, but the straight retirement
22 allowance shall not be payable for any month beginning before the
23 later of the retirement allowance beneficiary's death or
24 October 31, 1980. This subsection also applies to a retirant
25 whose effective date of retirement was on or before June 28,
26 1976, but the straight retirement allowance shall not be payable
27 for any month beginning before the later of the retirement
1 allowance beneficiary's death or January 1, 1986. A retirant who
2 on January 1, 1986 is receiving a reduced retirement allowance
3 because the retirant designated a retirement allowance
4 beneficiary and the retirement allowance beneficiary predeceased
5 the retirant is eligible to receive the straight retirement
6 allowance beginning January 1, 1986, but the straight retirement
7 allowance shall not be payable for any month beginning before
8 January 1, 1986.
9 (5) A retirant who returns to service pursuant to section 61
10 and whose retirement allowance beneficiary selected under
11 subsection (1)(b), (c), or (d) predeceases the member before he
12 or she again becomes a retirant may again choose a retirement
13 allowance beneficiary pursuant to subsection (1)(b), (c), or
14 (d).
15 (6) If a retirant receiving a reduced retirement allowance
16 under subsection (1)(b), (c), or (d) is divorced from the spouse
17 who had been designated as the retirant's retirement allowance
18 beneficiary under subsection (1)(b), (c), or (d), the election of
19 a reduced retirement allowance payment option shall be considered
20 void by the retirement system if the judgment of divorce or award
21 or order of the court, or an amended judgment of divorce or award
22 or order of the court, described in the public employee
23 retirement benefit protection act and dated after June 27, 1991
24 provides that the election of a reduced retirement allowance
25 payment option under subsection (1)(b), (c), or (d) is to be
26 considered void by the retirement system and the retirant
27 provides a certified copy of the judgment of divorce or award or
1 order of the court, or an amended judgment of divorce or award or
2 order of the court, to the retirement system. If the election of
3 a reduced retirement allowance payment option under subsection
4 (1)(b), (c), or (d) is considered void by the retirement system
5 under this subsection, the retirant's retirement allowance shall
6 revert to a straight retirement allowance, including
7 postretirement adjustments, if any, subject to an award or order
8 of the court as described in the public employee retirement
9 benefit protection act. The retirement allowance shall revert to
10 a straight retirement allowance under this subsection effective
11 the first of the month after the date the retirement system
12 receives a certified copy of the judgment of divorce or award or
13 order of the court. This subsection does not supersede a
14 judgment of divorce or award or order of the court in effect on
15 June 27, 1991. This subsection does not require the retirement
16 system to distribute or pay retirement assets on behalf of a
17 retirant in an amount that exceeds the actuarially determined
18 amount that would otherwise become payable if a judgment of
19 divorce had not been rendered.
20 (7) If the retirement allowance payments terminate before an
21 aggregate amount equal to the retirant's accumulated
22 contributions has been paid, the difference between the
23 retirant's accumulated contributions and the aggregate amount of
24 retirement allowance payments made shall be paid to the person
25 designated in a writing filed with the retirement board on a form
26 provided by the retirement board. If the designated person does
27 not survive the retirant or retirement allowance beneficiary, the
1 difference shall be paid to the deceased recipient's estate or to
2 the legal representative of the deceased recipient.
3 (8) A retirant who selected a retirement allowance
4 beneficiary under subsection (1)(b), (c), or (d) may change his
5 or her retirement allowance beneficiary if all of the following
6 apply:
7 (a) The first retirement allowance beneficiary is a spouse.
8 (b) The first retirement allowance beneficiary predeceases
9 the retirant after the retirement allowance effective date.
10 (c) The retirant marries another spouse after the retirement
11 allowance effective date.
12 (d) The retirant files a written request with the retirement
13 system to name his or her current spouse as a retirement
14 allowance beneficiary not earlier than 180 days and not later
15 than 1 year after the marriage of the retirant and the current
16 spouse except that a retirant whose first retirement allowance
17 beneficiary predeceases the retirant after the retirement
18 allowance effective date and before the effective date of the
19 amendatory act that added this subsection shall have 180 days
20 from the effective date of the amendatory act that added this
21 subsection to file a written request with the retirement system.
22 (9) A retirant who was not married on his or her retirement
23 allowance effective date and who did not select a payment option
24 provided in this section may select an optional form of benefit
25 payment under subsection (1)(b), (c), or (d) and designate a
26 retirement allowance beneficiary if all of the following apply:
27 (a) The retirant marries after his or her retirement
1 allowance effective date.
2 (b) The retirement allowance beneficiary is the retirant's
3 spouse.
4 (c) The retirant files a written request with the retirement
5 system to select the optional form of benefit payment under
6 subsection (1)(b), (c), or (d) and to designate his or her spouse
7 as the retirement allowance beneficiary, not earlier than 180
8 days and not later than 1 year after the retirant's marriage
9 except that a retirant who marries after the retirement allowance
10 effective date and before the effective date of the amendatory
11 act that added this subsection shall have 180 days from the
12 effective date of the amendatory act that added this subsection
13 to file a written request with the retirement system.
14 (10) The retirement allowance of the retirant who makes an
15 election under subsection (8) or (9) shall not be greater than
16 the actuarial equivalent of the retirement allowance that the
17 retirant would otherwise be entitled to under subsection (1)(a)
18 and shall become effective the first day of the month following
19 the filing of the written request with the retirement system.