May 23, 2007, Introduced by Senator PATTERSON and referred to the Committee on Judiciary.
A bill to amend 1992 PA 234, entitled
"The judges retirement act of 1992,"
(MCL 38.2101 to 38.2670) by adding sections 513 and 514.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 513. (1) Effective July 1, 2007, the retirement allowance
payable to a retirant or beneficiary of a deceased retirant under
Tier 1 is supplemented by the amount determined under subsection
(2).
(2) On or before April 1 of each state fiscal year, the
retirement system shall determine the amount by which the actuarial
value of the assets in Tier 1 exceed the present value of expected
future benefit payments for Tier 1 beneficiaries. If the amount by
which the actuarial value of the assets in Tier 1 exceed the
present value of expected future benefit payments for Tier 1
beneficiaries is an amount that will allow retirants and retirement
allowance beneficiaries to receive individual increases of $900.00
per year, the retirement system shall grant an increase of $900.00
per year to each retirant and retirement allowance beneficiary
receiving retirement payments under this act. In any year in which
the actuarial value of assets exceeds the present value of expected
future benefit payments by an amount less than the value of $900.00
per retirant, the increase shall be reduced on a pro rata basis to
reflect an amount less than $900.00 per retirant. If the actuarial
value of assets does not exceed the present value of expected
future benefits, no increase will be given for that year.
(3) The percentage of final compensation limits of section 503
do not apply to the increase authorized by this section.
(4) The recalculated retirement allowance shall be the basis
on which future adjustments to the retirement allowance are
calculated.
(5) The supplement provided by this section shall be
calculated pursuant to subsection (2) and shall be paid annually.
For a retirant or beneficiary of a deceased retirant who is
eligible to receive a supplement under this section, who is
receiving a retirement allowance pursuant to service credited under
the former judges retirement system, and who is receiving a
retirement allowance pursuant to service credited under the former
probate judges retirement system, the retirement system, pursuant
to this section, shall only supplement the retirement allowance
that is the largest in amount. If a retirant dies before December
31, 2007 and no benefits become payable under section 506 or 508,
the retirant's retirement allowance shall not be supplemented under
this section.
Sec. 514. (1) Effective July 1, 2007, the retirement allowance
payable to a retirant or beneficiary of a deceased retirant who
meets the requirements of subsection (2) under Tier 1 is
supplemented by 67%.
(2) To qualify for the supplement in subsection (1), all of
the following shall apply to a retirant of Tier 1:
(a) The retirant was potentially eligible to purchase 2 years'
service credit under this act, the former judge's retirement
system, or the former probate judge's retirement system because the
retirant served honorably on active duty as a member of the armed
services of the United States.
(b) The retirant was unable to purchase the service credit
while a member because the retirant had not accumulated 12 years of
credited service.
(c) The retirant was greater than 60 years of age when he or
she entered the system and was prevented from accumulating 12 years
of credited service by the mandatory retirement age for judges
found in section 19(3) of article VI of the state constitution of
1963.
(3) The percentage of final compensation limits of section 503
do not apply to the increase authorized by this section.
(4) The recalculated retirement allowance shall be the basis
on which future adjustments to the retirement allowance are
calculated.
(5) The supplement provided by this section shall be paid
annually. For a retirant or beneficiary of a deceased retirant who
is eligible to receive a supplement under this section, who is
receiving a retirement allowance pursuant to service credited under
the former judges retirement system, and who is receiving a
retirement allowance pursuant to service credited under the former
probate judges retirement system, the retirement system, pursuant
to this section, shall only supplement the retirement allowance
that is the largest in amount. If a retirant dies before December
31, 2007 and no benefits become payable under section 506 or 508,
the retirant's retirement allowance shall not be supplemented under
this section.