HB-5652, As Passed House, June 12, 2018
HB-5652, As Passed Senate, June 12, 2018
February 27, 2018, Introduced by Reps. Reilly, Albert, Runestad and VerHeulen and referred to the Committee on Financial Liability Reform.
A bill to amend 1992 PA 234, entitled
"The judges retirement act of 1992,"
by amending section 604 (MCL 38.2604), as amended by 2008 PA 514.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
604. (1) This section is enacted pursuant to under
section
401(a) of the internal revenue code, 26 USC 401, that which
imposes certain administrative requirements and benefit limitations
for qualified governmental plans. This state intends that the
retirement system be a qualified pension plan created in trust
under section 401 of the internal revenue code, 26 USC 401, and
that
the trust be an exempt organization exempt from taxation under
section 501 of the internal revenue code, 26 USC 501. The
department
shall administer the retirement system to fulfill this
the intent of this subsection.
(2) The retirement system shall be administered in compliance
with the provisions of section 415 of the internal revenue code, 26
USC 415, and regulations under that section that are applicable to
governmental plans and, beginning January 1, 2010, applicable
provisions
of the final regulations issued by the internal revenue
service
Internal Revenue Service on April 5, 2007. Employer-
financed benefits provided by the retirement system under this act
shall
must not exceed the applicable limitations set forth in
section 415 of the internal revenue code, 26 USC 415, as adjusted
by the commissioner of internal revenue under section 415(d) of the
internal revenue code, 26 USC 415, to reflect cost-of-living
increases, and the retirement system shall adjust the benefits,
including benefits payable to retirants and retirement allowance
beneficiaries, subject to the limitation each calendar year to
conform with the adjusted limitation. For purposes of section
415(b) of the internal revenue code, 26 USC 415, the applicable
limitation
shall apply applies to aggregated benefits received from
all qualified pension plans for which the office of retirement
services coordinates administration of that limitation. If there is
a conflict between this section and another section of this act,
this section prevails.
(3)
The assets of the retirement system shall must be held in
trust and invested for the sole purpose of meeting the legitimate
obligations
of the retirement system and shall must not be used for
any
other purpose. The assets shall must
not be used for or
diverted to a purpose other than for the exclusive benefit of the
members, vested former members, retirants, and retirement allowance
beneficiaries before satisfaction of all retirement system
liabilities.
(4) The retirement system shall return post-tax member
contributions made by a member and received by the retirement
system
to a member upon on retirement, pursuant to internal revenue
service
under Internal Revenue
Service regulations and approved
internal
revenue service Internal
Revenue Service exclusion ratio
tables.
(5) The required beginning date for retirement allowances and
other
distributions shall must not be later than April 1 of the
calendar year following the calendar year in which the employee
attains age 70-1/2 or April 1 of the calendar year following the
calendar year in which the employee retires. The required minimum
distribution requirements imposed by section 401(a)(9) of the
internal
revenue code, 26 USC 401, shall apply to this act and must
be administered in accordance with a reasonable and good faith
interpretation of the required minimum distribution requirements
for all years in which the required minimum distribution
requirements apply to this act.
(6) If the retirement system is terminated, the interest of
the members, vested former members, retirants, and retirement
allowance beneficiaries in the retirement system is nonforfeitable
to the extent funded as described in section 411(d)(3) of the
internal
revenue code, 26 USC 411, and related internal revenue
service
Internal Revenue Service regulations applicable to
governmental plans.
(7) Notwithstanding any other provision of this act to the
contrary that would limit a distributee's election under this act,
a distributee may elect, at the time and in the manner prescribed
by the retirement board, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover. This subsection
applies
to distributions made on or after January 1, 1993.December
31, 1992.
(8) For purposes of determining actuarial equivalent
retirement allowances under sections 506(1)(a) and (b) and 602, the
actuarially
assumed interest rate shall must
be 8% with utilization
of
the 1983 group annuity and mortality table.determined by the
director of the department and the retirement board in consultation
with the actuary using the mortality tables adopted by the
department and the retirement board.
(9) Notwithstanding any other provision of this act, the
compensation
of a member of the retirement system shall must be
taken into account for any year under the retirement system only to
the extent that it does not exceed the compensation limit
established in section 401(a)(17) of the internal revenue code, 26
USC 401, as adjusted by the commissioner of internal revenue. This
subsection
applies to any person an
individual who first becomes a
member
of the retirement system on or after October 1, September
30, 1996.
(10) Notwithstanding any other provision of this act,
contributions, benefits, and service credit with respect to
qualified military service will be provided under the retirement
system in accordance with section 414(u) of the internal revenue
code, 26 USC 414. This subsection applies to all qualified military
service
on or after December 12, 11,
1994. Beginning on January 1,
2007, in accordance with section 401(a)(37) of the internal revenue
code, 26 USC 401, if a member dies while performing qualified
military service, for purposes of determining any death benefits
payable
under this act, the member shall be is treated as having
resumed and then terminated employment on account of death.