HB-5261, As Passed House, November 29, 2012

SUBSTITUTE FOR

HOUSE BILL NO. 5261

     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 2010 PA 75.

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, the

following shall take place occur:

     (a) The retirant shall is 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 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.

     (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). A university that employs a retirant under this

subsection shall report that employment to the retirement system by

July 1 of each year. The university shall include in the report the

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

employed, and the total annual compensation paid to the retirant.

     (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 which 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 Subsection (1) does not

apply to a retirant if all of the following circumstances exist:

     (a) The retirant is employed by or at 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

House Bill No. 5261 (H-2) as amended November 29, 2012

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 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 any emergency situation

described in subdivision (a) for a total period not to exceed 6 3

years for that retirant.

     (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.

     (d) The reporting unit [Or employer] shall pay 100% of the

contribution rate

for [all benefits provided by the retirement system] that is identified

 in

section 41 to the retirement system for each retirant who becomes

employed by a reporting unit under this subsection.

     (5) The state superintendent of public instruction shall

compile a listing of critical shortage disciplines. This listing

shall be updated annually. It is the intent of the legislature that

teacher preparation institutions reform their program enrollment to

target the shortages and increase enrollment and completion of

science, technology, engineering, and math (STEM) teachers and

educators of students with disabilities before the sunset of

subsection (6).

House Bill No. 5261 (H-2) as amended November 29, 2012

     (6) Until July 1, 2011, [2014] and subject to subsection (7),

subsection (1) does not apply to a retirant if all of the following

circumstances exist:

     (a) The retirant is employed by or at 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 any situation described

in subdivision (a) for a period not to exceed 6 3 years for that

retirant.

     (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.

     (d) The reporting unit [or employer] shall pay 100% of the

contribution rate

for [all benefits provided by the retirement system] that is identified

 in

section 41 to the retirement system for each retirant who becomes

employed by a reporting unit under this subsection.

     (7) Subsection Subsections (4) and (6) shall only apply for

retirants who have been retired for at least 12 months before

becoming employed under this section.

     (8) Notwithstanding any other provision of this act to the

contrary, for any a retirant who retires on and or after July 1,

2010, and following a bona fide termination, including not working

in the month of the retirant's retirement effective date, and who

becomes employed by a reporting unit and the retirant's amount of

earnings in a calendar year exceeds 1/3 of the retirant's final

average compensation, the retirant shall forfeit his or her

retirement allowance and the retirement system subsidy for health

care benefits from the retirement system for as long as the

retirant is employed at the reporting unit unless the retirant is

employed under subsection (4) or (6). Any A retirant who has

forfeited the retirement system subsidy for health care benefits

under this subsection and who wants to retain health care benefits

shall pay the retirant's and retirement system's costs for such the

health care benefits. Upon termination of employment at the

reporting unit, the retirement allowance and health care benefits

shall resume without recalculation.

     (9) Notwithstanding any other provision of this act to the

contrary, for any a retirant who retires on and or after July 1,

2010, who performs core services at a reporting unit as determined

by the retirement system, whose amount of earnings in a calendar

year exceeds 1/3 of his or her final average compensation, but who

is employed by an entity other than the reporting unit or is an

independent contractor, the retirant shall forfeit his or her

retirement allowance and the retirement system subsidy for health

care benefits from the retirement system for as long as the

retirant is performing core services at the reporting unit unless

the retirant is employed under subsection (4) or (6). Any A

retirant who has forfeited the retirement system subsidy for health

care benefits under this subsection and who wants to retain health

care benefits shall pay the retirant's and retirement system's

House Bill No. 5261 (H-2) as amended November 29, 2012

costs for such the health care benefits. Upon termination of

services at the reporting unit, the retirement allowance and health

care benefits shall resume without recalculation. As used in this

subsection, [until July 1, 2014,] "core service" does not include service

 provided by a

substitute teacher whose amount of earnings in a calendar year is

no more than [2/3] of his or her final average compensation.