September 20, 2016, Introduced by Rep. Howrylak and referred to the Committee on Financial Liability Reform.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending section 42 (MCL 38.1342), as amended by 2012 PA 300.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 42. (1) Beginning with the 1994-95 state fiscal year, a
reporting unit shall contribute the entire amount determined under
section 41 to the reserve for employer contributions and to the
reserve for health benefits. The reporting unit contribution under
this subsection is the exclusive obligation of the reporting unit
payable out of general budget resources of the reporting unit,
including funds available under local millage and other local
resources and from the state school aid allocation to the reporting
unit, and shall not be a separate obligation by specific
reimbursement or otherwise of this state.
(2) As authorized by resolution or other enabling act of its
governing body, the employer shall pick up all contributions of a
member
made pursuant to under section 43a for all compensation paid
on
or after January 1, 1987 December 31, 1986 and reported to the
retirement system. Although considered contributions of a member
for certain purposes under this act, all contributions picked up
shall
be are treated as paid by the employer in lieu instead of
contributions by the employee. Contributions picked up as provided
in
this subsection shall must
be paid from the same source of funds
that is used for paying compensation to the member. The employer
may pick up these contributions by either a reduction to the
member's cash salary, an offset against a future salary increase,
or a combination of a reduction in salary and offset against a
future salary increase. This subsection does not apply, and the
employer shall not deduct, offset, or remit contributions, until
the department receives notification from the United States
internal
revenue service Internal
Revenue Service that
contributions
picked up shall will not be included as gross income
of the member until they are distributed or made available to the
member, retirant, retirement allowance beneficiary, or refund
beneficiary.
(3) The employer shall deduct from a member's compensation the
contributions for social security provided in 1951 PA 205, MCL
38.851
to 38.871. Contributions shall must
be made while the member
remains a public school employee. Each reporting unit official
shall deduct the social security contributions from the
compensation of each member for each payroll period after the date
the
employee becomes a member. Social security contributions shall
must be made notwithstanding that the minimum compensation provided
by law is changed. Each member is considered to have agreed to the
contributions prescribed in this subsection.
(4) Each reporting unit official shall forward member
contributions to the retirement system on a schedule and in a
manner determined by the retirement system.
(5) Each reporting unit official shall forward the entire
employer contribution required by this act to the retirement system
on a schedule and in a manner determined by the retirement system.
(6) Each reporting unit official shall submit to the
retirement system a report that includes the information for
retirement purposes, including, but not limited to, persons
employed, retirants performing services at a reporting unit who are
employed by an entity other than the reporting unit or who are
independent contractors, wages or amounts paid, hours, and
contributions
required under this act. The report shall contain
must
include the information on a pay period
basis and shall must
be submitted to the retirement system on a schedule and in a manner
determined by the retirement system. The superintendent for a
reporting unit or the chief administrator for a reporting unit that
does not have a superintendent shall complete an annual
certification that gives authorization for the employees of the
reporting unit to report the information to the retirement system.
(7) If a reporting unit fails to submit a report or
contributions, or both, according to the schedule established by
the
retirement board, a late fee shall be paid by the reporting
unit shall pay a late fee. If the remittance of contributions is
late,
the late fee shall must include interest for each day that
the remittance of contributions is late. The retirement board
periodically
may establish the late fee, which shall that must not
be
less than $25.00, and interest charges, which shall that must
not
be less more than 6% 8% per annum. If a reporting
unit fails to
correct errors on a report before the errors are discovered by the
retirement
system or if such the errors are intentional, the
reporting unit shall pay the late fee and interest charges as
described in this subsection for each day that the report is in
error, unless reasonable cause is shown to the satisfaction of the
retirement system.
(8)
Upon On written notice request from the retirement
board,
the state budget director may through written notice direct the
superintendent
of public instruction and the state treasurer shall
to withhold payment of state funds, in part or in whole, payable
from the state school aid appropriation or higher education
appropriations to a reporting unit that fails to comply with this
section.