March 22, 2007, Introduced by Reps. Gonzales, Cushingberry and Alma Smith and referred to the Committee on Appropriations.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending section 4 (MCL 38.1304), as amended by 2003 PA 17.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4. (1) "Compound interest" means interest compounded
annually on July 1 on the contributions on account as of the
previous July 1 and computed at the rate of investment return
determined under section 104a(1) for the last completed state
fiscal year.
(2) "Contributory service" means credited service other than
noncontributory service.
(3) "Deferred member" means a member who has ceased to be a
public school employee and has satisfied the requirements of
section 82 for a deferred vested service retirement allowance.
(4) "Department" means the department of management and
budget.
(5)
"Designated date" means September 30, 1997 2006.
(6) "Direct rollover" means a payment by the retirement system
to the eligible retirement plan specified by the distributee.
(7) "Distributee" includes a member or deferred member.
Distributee also includes the member's or deferred member's
surviving spouse or the member's or deferred member's spouse or
former spouse under an eligible domestic relations order, with
regard to the interest of the spouse or former spouse.
(8) Beginning January 1, 2002, except as otherwise provided in
this subsection, "eligible retirement plan" means an individual
retirement account described in section 408(a) of the internal
revenue code, an individual retirement annuity described in section
408(b) of the internal revenue code, an annuity plan described in
section 403(a) of the internal revenue code, or a qualified trust
described in section 401(a) of the internal revenue code, an
annuity contract described in section 403(b) of the internal
revenue code, or an eligible plan under section 457(b) of the
internal revenue code which is maintained by a state, political
subdivision of a state, or an agency or instrumentality of a state
or political subdivision of a state and which agrees to separately
account for amounts transferred into such eligible plan under
section 457(b) of the internal revenue code from this retirement
system, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to a surviving spouse, an eligible retirement plan
means an individual retirement account or an individual retirement
annuity described above.
(9) Beginning January 1, 2002, "eligible rollover
distribution" means a distribution of all or any portion of the
balance to the credit of the distributee. Eligible rollover
distribution does not include any of the following:
(a) A distribution made for the life or life expectancy of the
distributee or the joint lives or joint life expectancies of the
distributee and the distributee's designated beneficiary.
(b) A distribution for a specified period of 10 years or more.
(c) A distribution to the extent that the distribution is
required under section 401(a)(9) of the internal revenue code.
(d) The portion of any distribution that is not includable in
federal gross income, determined without regard to the exclusion
for net unrealized appreciation with respect to employer
securities, except to the extent that the portion of a distribution
that is not includable in federal gross income is paid to either of
the following:
(i) An individual retirement account or annuity described in
section 408(a) or (b) of the internal revenue code.
(ii) A qualified defined contribution plan as described in
section 401(a) or 403(a) of the internal revenue code that agrees
to separately account for amounts transferred, including separately
accounting for the portion of the distribution that is includable
in gross income and the portion of the distribution which is not
includable in gross income.
(10) "Employee organization professional services leave" or
"professional services leave" means a leave of absence that is
renewed annually by the reporting unit so that a member may accept
a position with a public school employee organization to which he
or she belongs and which represents employees of a reporting unit
in employment matters. The member shall be included in membership
of the retirement system during a professional services leave if
all of the conditions of section 71(5) and (6) are satisfied.
(11) "Employee organization professional services released
time" or "professional services released time" means a portion of
the school fiscal year during which a member is released by the
reporting unit from his or her regularly assigned duties to engage
in employment matters for a public school employee organization to
which he or she belongs. The member's compensation received or
service rendered, or both, as applicable, by a member while on
professional services released time shall be reportable to the
retirement system if all of the conditions of section 71(5) and (6)
are satisfied.
(12) "Final average compensation" means the aggregate amount
of a member's compensation earned within the averaging period in
which the aggregate amount of compensation was highest divided by
the member's number of years, including any fraction of a year, of
credited service during the averaging period. The averaging period
shall be 36 consecutive calendar months if the member contributes
to the member investment plan; otherwise, the averaging period
shall be 60 consecutive calendar months. If the member has less
than 1 year of credited service in the averaging period, the number
of consecutive calendar months in the averaging period shall be
increased to the lowest number of consecutive calendar months that
contains 1 year of credited service.
(13) "Health benefits" means hospital, medical-surgical, and
sick care benefits and dental, vision, and hearing benefits for
retirants, retirement allowance beneficiaries, and health insurance
dependents provided pursuant to section 91.
(14) "Internal revenue code" means the United States internal
revenue code of 1986.
(15) "Long-term care insurance" means group insurance that is
authorized by the retirement system for retirants, retirement
allowance beneficiaries, and health insurance dependents, as that
term is defined in section 91, to cover the costs of services
provided to retirants, retirement allowance beneficiaries, and
health insurance dependents, from nursing homes, assisted living
facilities, home health care providers, adult day care providers,
and other similar service providers.
(16) "Member investment plan" means the program of member
contributions described in section 43a.