HB-5093, As Passed House, November 7, 2017

SUBSTITUTE FOR

HOUSE BILL NO. 5093

     A bill to amend 1980 PA 300, entitled

"The public school employees retirement act of 1979,"

by amending section 84b (MCL 38.1384b), as amended by 2012 PA 359.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 84b. (1) Beginning February 1, 2013, the calculation of a

retirement allowance under this act for a member who did not make

the election under section 59(1) and who made or is considered to

have made the alternative election under section 59(2)(a) shall

must include only the following items of credited service, as

applicable, multiplied by 1.5% of final average compensation as

provided in section 84:

     (a) The years and fraction of a year of credited service

accrued to that the member before the transition date.

     (b) Service credit that was purchased before February 1, 2013.

     (c) Service credit that is purchased under a payment plan

pursuant to under this act that was in effect as of February 1,

2013.

     (d) Credit for years of service under sections 73 and 108(10).

     (2) Beginning February 1, 2013, the calculation of a

retirement allowance under this act for a member described in

subsection (1) shall must also include the following items of

credited service, as applicable, multiplied by 1.25% of final

average compensation:

     (a) The years and fraction of a year of credited service

accrued to that the member on and after the transition date.

     (b) Service credit that was purchased on and after February 1,

2013, except as provided in subsection (1)(c).

     (3) Beginning February 1, 2013, the calculation of a

retirement allowance under this act for a member who did not make

the election under section 59(1) and who made the alternative

election under section 59(2)(b) shall must include only the

following items of credited service, as applicable, multiplied by

1.5% of final average compensation as provided in section 84:

     (a) The years and fraction of a year of credited service

accrued to that the member before the transition date.

     (b) Service credit that was purchased before February 1, 2013.

     (c) Service credit that is purchased under a payment plan

pursuant to under this act that was in effect as of January 31,

2013.

     (d) Credit for years of service under sections 73 and 108(10).

     (4) Beginning February 1, 2013, the calculation of a

retirement allowance under this act for a member described in

subsection (3) shall must not include any year or fraction of a

year of service performed by that the member on and after the

transition date or any service credit that is purchased by that the

member after February 1, 2013, except as provided in subsection

(3)(c). Beginning with the first payroll date after the transition

date, and ending upon on the member's termination of service, the

employer of a member described in subsection (3) shall contribute

4% of the member's compensation as defined in section 122(2) to the

member's Tier 2 account. A member is vested in employer

contributions made under this subsection according to the vesting

provisions under section 132. A member shall must be credited with

years of service accrued under Tier 1 as of the transition date for

purposes of meeting the applicable vesting requirements. Beginning

with the first payroll date after February 1, 2018, all of the

following apply to a member described in subsection (3):

     (a) Unless the member affirmatively elects not to contribute

or elects to contribute a lesser amount, the member shall

contribute 3% of his or her compensation to his or her Tier 2

account.

     (b) The member's employer shall make a contribution to the

member's Tier 2 account in an amount equal to 100% of the first 3%

of compensation contributed by the member under subdivision (a).

     (c) Beginning February 1, 2018, all contributions made by an

employer under subdivision (b) must be paid by appropriation from

the state school aid fund established by section 11 of article IX

of the state constitution of 1963, assuming 100% participation by

all members described in subsection (3).

     (5) Beginning February 1, 2013, the calculation of a

retirement allowance under this act for a member who makes the

election and attainment date designation under section 59(1) shall

must include only the following items of credited service, as

applicable, multiplied by 1.5% of final average compensation as

provided in section 84:

     (a) The years and fraction of a year of credited service

accrued to that the member on or before the attainment date.

     (b) Service credit that was purchased on or before the

attainment date.

     (c) Service credit that is purchased under a payment plan

pursuant to under this act that was in effect as of the attainment

date.

     (d) Credit for years of service under sections 73 and 108(10).

     (6) Beginning February 1, 2013, the calculation of a

retirement allowance under this act for a member described in

subsection (5) shall must also include the following items of

credited service, as applicable, multiplied by 1.25% of final

average compensation:

     (a) The years and fraction of a year of credited service

accrued to that the member on and after the attainment date.

     (b) Service credit that was purchased on and after the

attainment date, except as provided in subsection (5)(c).

     (7) Beginning on the transition date, a member described in

subsection (1), (3), or (5) shall must continue to accumulate years

of service credit as necessary for the purpose of vesting in a

retirement allowance and to determine when a retirement allowance

may begin under this act, regardless of when the service credit was

accrued, except as otherwise provided in section 59(8). A member

described in subsection (1), (3), or (5) shall must continue to be

treated as a member for all purposes, except as otherwise provided

in section 59(8) and except for the limitations on credited service

and calculation of a retirement allowance as provided in

subsections (1) through (6).

     (8) The calculation of a retirement allowance under this act

for a member who makes the election under section 59(1) but who

does not make the attainment date designation under section 59(1)

shall must include all items of credited service accrued to that

the member, regardless of when the service credit was accrued,

which shall must be multiplied by 1.5% of final average

compensation as provided in section 84.

     (9) As used in this section, "attainment date" means the final

day of the pay period in which the member attains 30 years of

credited service.