HB-4799, As Passed House, May 25, 2007

SUBSTITUTE FOR

HOUSE BILL NO. 4799

     A bill to amend 1980 PA 300, entitled

"The public school employees retirement act of 1979,"

by amending section 61 (MCL 38.1361), as amended by 2006 PA 158.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 61. (1) Except as otherwise provided in this section, if

a retirant is receiving a retirement allowance other than a

disability allowance payable under this act or under former 1945 PA

136, on account of either age or years of personal service

performed, or both, and becomes employed by a reporting unit

directly or indirectly on or after January 1, 2008, including, but

not limited to, reemployment through a contractual arrangement with

other parties, the following shall take place:

     (a) The retirant shall not be entitled to a new final average

compensation or additional service credit under this retirement

system unless additional service is performed equivalent to 5 or

more years of service credit or, if the retirant has contributed to

the member investment plan, the equivalent of 3 or more years of

service credit. The retirant may elect to have the retirement

allowance recomputed based on the added credit or the final average

compensation resulting from the added service, or both. A

retirement allowance shall not be recomputed until the retirant

pays into the retirement system an amount equal to the retirant's

new final average compensation multiplied by the percentage

determined under section 41(2) for normal cost and unfunded

actuarial accrued liabilities, not including the percentage

required for the funding of health benefits, multiplied by the

total service credit in the period in which the retirant's

additional service was performed.

     (b) The If the retirant has been directly rehired by a

reporting unit, the retirant's retirement allowance shall be

reduced by the lesser of the amount that the earnings in a calendar

year exceed the amount permitted without a reduction of benefits

under the social security act, chapter 531, 49 Stat. 620, or 1/3 of

the retirant's final average compensation. For purposes of

computing allowable earnings under this subdivision, the final

average compensation shall be increased by 5% for each full year of

retirement.

     (c) If the retirant has been reemployed through a contractual

arrangement with other parties, the retirant's retirement allowance

shall be suspended during the period of employment.

     (2) The retirement system may offset retirement benefits

payable under this act against amounts owed to the retirement

system by a retirant or retirement allowance beneficiary.

     (3) Subsection (1) does not apply to a retirant if all of the

following circumstances exist:

     (a) The retirant is a former teacher or administrator employed

in a teaching or research capacity by a university that is

considered a reporting unit for the limited purpose described in

section 7(3).

     (b) The retirant is not eligible to use any service or

compensation attributable to the employment described in

subdivision (a) for a recomputation of his or her retirement

allowance.

     (c) A university that employs a retirant pursuant to this

subsection shall report such employment to the retirement system by

July 1 of each year. The report to be filed shall include the name

of the retirant, the capacity in which the retirant is employed,

and the total annual compensation paid to the retirant.

     (4) Until July 1, 2011, subsection (1) does not apply to a

retirant if all of the following circumstances exist:

     (a) The retirant is employed by a reporting unit that has an

approved emergency situation, not including a situation caused by a

labor dispute, that necessitates the hiring of a retirant in the

capacity of a teacher, principal, stationary engineer,

administrator, or other category as determined by the

superintendent of public instruction to prevent depriving students

of an education. The chief executive officer or superintendent of

the school district shall include with the written notification

documentation showing that more than 8% of all classes in the

district during the 1998-99 school year are taught by full-time

substitute teachers who are not certificated in the subjects or

grade levels which they teach. Within 30 days after receipt of the

notification and documentation under this subdivision, the

department of education shall notify the chief executive officer or

superintendent and the retirement system of its approval or

disapproval of the emergency situation. If disapproved by the

department of education, this subsection does not apply.

     (b) The retirant is employed under an emergency situation

described in subdivision (a) for a period not to exceed 6 years.

     (c) The retirant is not eligible to use any service or

compensation attributable to the employment described in

subdivision (a) for a recomputation of his or her retirement

allowance.

     (5) On or before July 1, 1999, the state superintendent of

public instruction shall compile a listing of critical shortage

disciplines. This listing shall be updated annually.

     (6) Until July 1, 2011, subsection (1) does not apply to a

retirant if all of the following circumstances exist:

     (a) The retirant is employed by a reporting unit that has a

situation, not including a situation caused by a labor dispute,

that necessitates the hiring of a retirant in an area that has been

identified by the state superintendent of public instruction as a

critical shortage discipline pursuant to subsection (5).

     (b) The retirant is employed under a situation described in

subdivision (a) for a period not to exceed 6 years.

     (c) The retirant is not eligible to use any service or

compensation attributable to the employment described in

subdivision (a) for a recomputation of his or her retirement

allowance.

     (7) The provisions of subsections (4) and (6) shall only apply

for retirants who have been retired for at least 12 months before

becoming employed under this section.

     (3) Subsection (1) does not apply if all of the following

conditions apply:

     (a) The retirant has been directly reemployed by a reporting

unit.

     (b) Until July 1, 2009, the retirant is employed by a

reporting unit that has an approved emergency situation, not

including a situation caused by a labor dispute, that necessitates

the hiring of a retirant in the capacity of a teacher, principal,

stationary engineer, administrator, or other category as determined

by the superintendent of public instruction to prevent depriving

students of an education. The chief executive officer or

superintendent of the school district shall include with the

written notification documentation showing that more than 8% of all

classes in the district during the 1998-1999 school year are taught

by full-time substitute teachers who are not certificated in the

subjects or grade levels which they teach. Within 30 days after

receipt of the notification and documentation under this

subdivision, the superintendent of public instruction shall notify

the chief executive officer or superintendent and the retirement

system of his or her approval or disapproval of the emergency

situation and of each specific position of reemployment of a

retirant proposed by the chief executive officer or superintendent.

     (c) The retirant is employed under an emergency situation

described in subdivision (b) for a period not to exceed 6 years.

     (d) The retirant is not eligible to use any service or

compensation attributable to the employment described in

subdivision (b) for a recomputation of his or her retirement

allowance.

     Enacting section 1. This amendatory act does not take effect

unless House Bill No. 4500 of the 94th Legislature is enacted into

law.

     Enacting section 2. This amendatory act takes effect January

1, 2008.