HOUSE BILL No. 4975

June 21, 2007, Introduced by Rep. Ball and referred to the Committee on Oversight and Investigations.

A bill to amend 1943 PA 240, entitled

"State employees' retirement act,"

by amending sections 17m and 20d (MCL 38.17m and 38.20d), section

17m as added by 1998 PA 205 and section 20d as amended by 2002 PA

93.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 17m. (1) A member may elect to purchase not more than 5

years of service credit less the number of years of service credit

purchased under sections 17e, 17f, and 17k, upon request and

payment to the retirement system of the actuarial cost.

(2) Service credit purchased under this section may not be

used to satisfy the minimum number of years of service credit

required to receive a retirement allowance under this act.

(3) If a member who made payment under this section dies and a

retirement allowance is not payable, or if the member leaves

service and a retirement allowance is not payable, the payment made

by the member shall be refunded upon request to the member, the

member's refund beneficiary, if any, or to the member's legal

representative or estate.

(4) A member shall not purchase service credit unless the

member has performed not less than 10 years of actual service.

Sec. 20d. (1) On and after July 1, 1974, hospitalization and

medical coverage insurance premium payable by any retirant or his

or her beneficiary and his or her dependents under any group health

plan authorized by the Michigan civil service commission and the

department of management and budget shall be paid by the retirement

board from the health insurance reserve fund created in section 11.

The amount payable shall be in the same proportion of premium

payable by the state of Michigan for the classified employees

occupying positions in the state civil service. The hospitalization

and medical insurance premium payable shall be paid from

appropriations made for this purpose to the health insurance

reserve fund sufficient to cover the premium payment needed to be

made.

(2) Effective January 1, 1988, 90% of the premium payable by a

retirant or the retirant's beneficiary and his or her dependents

for dental coverage or vision coverage, or both, under any group

plan authorized by the Michigan civil service commission and the

department of management and budget shall be paid by the retirement

board from the health insurance reserve fund created in section 11.

(3) The department of management and budget shall calculate

for each fiscal year any cost savings that have accrued to this

state as a result of the implementation of 1996 PA 487 over the

costs that would have been incurred by this state to fund premiums

payable pursuant to section 68 had 1996 PA 487 not been

implemented. The total amount of the cost savings, if any, shall be

allocated to the health advance funding subaccount created under

section 11(9).

(4) On and after March 31, 1997, the retirement system shall

also pay health insurance premiums described in this section in the

manner prescribed in section 68.

(5) Service credit purchased shall not be credited toward

vesting of health insurance premium payments for retirants under

this section. A member who elects to purchase service credit shall

have his or her benefits under this section determined by the

retirement system in the manner prescribed in this subsection. The

retirement system shall first determine whether the purchase of

service credit allowed the member to retire earlier than the member

would have been eligible to retire without the purchase of service

credit. The retirement system shall then determine the difference

between the member's retirement allowance effective date and the

effective date that the member would have been eligible to retire

if the member had not purchased the service credit. The member who

is subject to this subsection shall not be eligible for health care

benefits under this section until the effective date that the

member would have been eligible to retire if the member had not

purchased the service credit.

(6) ~~(5)~~ For purposes of this section, "retirant" includes a

person who retires under section 306 or 410 of the Michigan