October 12, 2017, Introduced by Rep. LaFave 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 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 this subsection 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.