March 9, 2016, Introduced by Rep. Somerville and referred to the Committee on Financial Liability Reform.
A bill to prescribe the compensation used to calculate pension
benefits for employees of certain public employers.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"public employee retirement benefit calculation act".
Sec. 3. As used in this act:
(a) "Base pay" means the remuneration paid to an employee on
account of the employee's service. Base pay does not include any of
the following:
(i) Payment for overtime services.
(ii) Remuneration paid instead of accumulated sick leave.
(iii) Remuneration received as a bonus.
(iv) Payment for accrued vacation pay.
(v) One-time lump-sum payments.
(vi) The cost of fringe benefits, including, but not limited
to, a medical benefit plan. As used in this subparagraph, "medical
benefit plan" means that term as defined in section 2 of the
publicly funded health insurance contribution act, 2011 PA 152, MCL
15.562.
(vii) Remuneration paid for the specific purpose of increasing
the final average compensation.
(b) "Member" means a member of a defined benefit plan under a
retirement system.
(c) "Retirement system" means a retirement system established
by a political subdivision of this state. Retirement system does
not include a state unit as that term is defined in section 2 of
the public employee retirement benefit protection act, 2002 PA 100,
MCL 38.1682.
Sec. 5. Except as otherwise provided in section 4p of the home
rule city act, 1909 PA 279, MCL 117.4p, beginning January 1, 2017,
for a political subdivision of this state that provides a defined
benefit plan as part of a retirement system for its employees, the
compensation used to calculate a pension benefit under the defined
benefit plan may only include base pay. The calculation using only
base pay required under this section does not apply to years of
service accrued before January 1, 2017. However, if a collective
bargaining agreement that is in effect on January 1, 2017 requires
that the compensation used to calculate a pension benefit includes
more than base pay, the compensation used to calculate the pension
benefit of a member subject to the collective bargaining agreement
is the compensation provided in the collective bargaining agreement
until the collective bargaining agreement expires or is
renegotiated.