Bill Text: MI HB5033 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Retirement; public school employees; interest on reporting unit contribution late fee; revise cap. Amends sec. 42 of 1980 PA 300 (MCL 38.1342).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-09-28 - Bill Electronically Reproduced 09/27/2017 [HB5033 Detail]

Download: Michigan-2017-HB5033-Introduced.html

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HOUSE BILL No. 5033

 

 

September 27, 2017, 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 2017 PA 92.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 42. (1) Beginning with the state fiscal year ending

 

September 30, 1995 and subject to section 41b, 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 is not 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 under section 43a for all compensation paid after

 

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 must be treated as paid by

 

the employer in lieu of contributions by the employee.

 

Contributions picked up as provided in this subsection 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 that contributions picked up

 

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 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 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 must include the

 

information on a pay period basis and 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, the reporting unit shall pay a late fee. If

 

the remittance of contributions is late, the late fee must include

interest for each day that the remittance of contributions is late.

 

The retirement board periodically may establish the late fee, which

 

must not be less than $25.00, and interest charges, which 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 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) 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.