HB-5261, As Passed Senate, December 13, 2012
SENATE 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 (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.
(4) (5)
The state superintendent of public
instruction shall
compile a listing of critical shortage disciplines. This listing
shall be updated annually.
(5) (6)
Until July 1, 2011, 2014, 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).(4).
(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
House Bill No. 5261 as amended December 13, 2012
compensation attributable to the employment described in
subdivision (a) for a recomputation of his or her retirement
allowance.
(d) The reporting unit shall pay 100% of the contribution
rates for the unfunded actuarial accrued liability for retiree
health care and the unfunded actuarial accrued liability for
pension to the retirement system for each retirant who becomes
employed by a reporting unit under this subsection.
(6) (7)
Subsection (6) (5) shall
only apply for retirants who
have been retired for at least 12 months before becoming employed
under this section.
(7) (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 (5)<<, (9), or (10)>>. 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
House Bill No. 5261 as amended December 13, 2012
shall resume without recalculation.
(8) (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, 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 (9) <<or (10)>>. 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 services at the reporting unit,
the retirement allowance and health care benefits shall resume
without recalculation.
(9) Until July 1, 2014, subsection (1) does not apply to a
retirant who retires on or after July 1, 2010; who following a bona
fide termination, including not working in the month of his or her
retirement effective date, becomes employed as a substitute teacher
by a reporting unit, by an entity other than the reporting unit, or
as an independent contractor; and whose amount of earnings
attributable to employment by or at a reporting unit in a calendar
year does not exceed 1/3 of his or her final average compensation.
A retirant described in this subsection is not eligible to use any
service or compensation attributable to the employment described in
House Bill No. 5261 as amended December 13, 2012 (1 of 2)
this subsection for a recomputation of his or her retirement
allowance. The reporting unit at which the retirant provides
substitute teacher services described in this subsection shall pay
100% of the contribution rates for the unfunded actuarial accrued
liability for retiree health care and the unfunded actuarial
accrued liability for pension to the retirement system for the
employment described in this subsection. The reporting unit shall
report the engagement of substitute teachers to the retirement
system at the same interval the reporting unit reports information
to the retirement system with regard to its other employees. The
reporting unit shall include in the report the name of the
substitute teacher and the total earnings paid to the substitute
teacher for that reporting period. In order to comply with the
reporting requirements of this subsection, a reporting unit that
engages substitute teachers through an entity other than a
reporting unit or as independent contractors shall obtain from the
substitute teacher's employer a list of all substitute teachers the
employer supplies to that reporting unit and the total earnings
paid to each substitute teacher for the reporting period. An
employer other than a reporting unit that employs substitute
teachers as described in this subsection shall provide to the
reporting unit all information that the reporting unit is required
to report to the retirement system under this subsection. For the
purposes of this subsection, an employer includes an independent
contractor.
<<(10) Until July 1, 2014, subsection (1) does not apply to a retirant who retires on or after July 1, 2010; who following a bona
fide termination, including not working in the month of his or
her retirement effective date, becomes employed as an instructional coach or a school improvement facilitator by an entity other than the reporting unit or as an independent contractor; and whose amount of earnings attributable to employment at a reporting unit in a calendar year does not exceed 1/3 of his or her final average compensation. A retirant described in this subsection is not eligible to use any service or compensation attributable to the employment described in this subsection for a recomputation of his or her retirement allowance.
The reporting unit at which the retirant provides the services described in this subsection shall pay 100% of the contribution rates
for the unfunded actuarial accrued liability for retiree health care and the unfunded actuarial accrued liability for pension to the retirement system for the employment described in this subsection. The reporting unit shall report the engagement of instructional coaches or school improvement facilitators to the retirement system at the same interval the reporting unit reports information to the retirement system with regard to its other employees. The reporting unit shall include in the report the name of the instructional coach or school improvement facilitator and the total earnings paid to the coach or facilitator for that reporting period. In order to comply with the reporting requirements of this subsection, a reporting unit shall obtain from the coach's or facilitator's employer a list of all instructional coaches and school improvement facilitators the employer supplies to that reporting unit and the total earnings paid to each coach or facilitator for the reporting period. An employer other than a reporting unit that employs instructional coaches or school improvement facilitators as described in this subsection shall provide to the reporting unit all information that the reporting unit is required to report to the retirement system under this subsection. For the purposes of this subsection, an employer includes an independent contractor. As used in this subsection, "instructional coach" and "school improvement facilitator" mean those terms as used in the listing of critical shortage disciplines developed by the state superintendent of public instruction under subsection (4).>>