SUSPEND PUBLIC SCHOOL PENSION

IF RETIRANT IS RE-EMPLOYED

House Bill 4799

Sponsor:  Rep. Lorence Wenke

Committee:  Education

Revised Summary

Complete to 5-24-07

A REVISED SUMMARY OF HOUSE BILL 4799 AS INTRODUCED 5-17-07

House Bill 4799 would amend the Public School Employees Retirement Act to freeze retirement allowance payments of a retired public school employee if the individual were re-employed in schools directly or indirectly (including through third-party contracts).  The retirement payments would remain suspended during the period of re-employment.  The pension suspension provision would begin on the effective date of the bill. 

Currently, if a retirant is re-employed in a school system, the retirement allowance is reduced using a formula spelled out in the statute.  The bill would instead suspend the payment of a retirement allowance.

Also under current law, school retirees can be re-employed by a school district as administrators and teachers for up to six years—without a reduction in the retirement allowance—in school districts where there are critical shortages of eligible personnel to fill those roles.  The superintendent of public instruction compiles a list of critical shortage disciplines, and that list is updated annually.   Under the bill, these provisions would be eliminated.

            MCL 38.1361

FISCAL IMPACT:

The bill would have an indeterminate fiscal impact.  More data is needed to evaluate the impact on community colleges, whose employees are part of the Public School Employees' Retirement Act.

                                                                                           Legislative Analyst:   J. Hunault

                                                                                                  Fiscal Analyst:   Al Valenzio

■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.