VALUATION SUMMARY: STATE PENSION SYSTEMS                                              S.B. 738:

                                                                                              SUMMARY AS ENACTED

Senate Bill 738 (as enacted)                                                    PUBLIC ACT 145 of 2016

Sponsor:  Senator Darwin L. Booher

Senate Committee:  Appropriations

House Committee:  Appropriations

Date Completed:  4-21-17

CONTENT

The bill amended the Public Employee Retirement System Investment Act to require an investment fiduciary, when publishing an annual report, to include an executive summary of both the unfunded actuarial accrued liabilities for retiree health and pension and the system's funded ratio based on the ratio of valuation assets to actuarial accrued liabilities on a plan-year basis. The bill requires these summary reports for a "state unit", and defines "state unit" to include the pension systems established under State Employees' Retirement Act, the Public School Employees Retirement Act, the Judges Retirement Act, and the State Police Retirement Act.

The bill also requires an investment fiduciary to submit the executive summary reports to the Senate and House Appropriations Committees and to the Senate and House Fiscal Agencies not less than 30 days after publication. (In the case of the State's retirement systems, the Department of Treasury is the investment fiduciary.)

Finally, the bill requires a representative of the Office of Retirement Services to appear before the Senate and House Appropriations Committees on request of the chairperson of the Committee to testify about the system's summary annual report required by the bill.

The bill took effect on June 7, 2016.

MCL 38.1133                                                                                                             

FISCAL IMPACT

In actual practice, the Office of Retirement Services produces the annual summary reports, with input from the Department of Treasury. The bill's requirement to include an executive summary in the annual report should not result in any additional State costs, and the bill will have no impact on local units of government.

                                                                                Fiscal Analyst:  Kathryn Summers

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.