Bill Text: MI HB5218 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Retirement; public school employees; defined contribution only for employees hired after certain date; provide for. Amends secs. 5, 81d & 132 of 1980 PA 300 (MCL 38.1305 et seq.) & adds sec. 133.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2016-01-14 - Bill Electronically Reproduced 01/13/2016 [HB5218 Detail]

Download: Michigan-2015-HB5218-Introduced.html

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HOUSE BILL No. 5218

January 13, 2016, Introduced by Rep. Kelly and referred to the Committee on Appropriations.

 

     A bill to amend 1980 PA 300, entitled

 

"The public school employees retirement act of 1979,"

 

by amending sections 5, 81d, and 132 (MCL 38.1305, 38.1381d, and

 

38.1432), section 5 as amended and section 81d as added by 2012 PA

 

300 and section 132 as added by 2010 PA 75, and by adding section

 

133.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5. (1) "Member" means a public school employee, except

 

that member does not include any of the following:

 

     (a) A person enrolled in a neighborhood youth corps program

 

operated with funds from the federal office of economic opportunity

 

or a person enrolled in a comparable youth training program

 

designed to prevent high school dropouts and rehabilitate high

 

school dropouts operated by an intermediate school district.

 

     (b) A person enrolled in a transitional public employment

 

program and employed by a reporting unit.

 

     (c) A person employed by a reporting unit while enrolled as a

 

full-time student in that same reporting unit.

 

     (d) A person who elects to participate in the optional

 

retirement program under the optional retirement act of 1967, 1967

 

PA 156, MCL 38.381 to 38.388.

 

     (e) A retirant of this retirement system.

 

     (f) A person, not regularly employed by a reporting unit, who

 

is employed by a reporting unit through a summer youth employment

 

program established pursuant to under the Michigan youth corps act,

 

1983 PA 69, MCL 409.221 to 409.229.

 

     (g) A person, not regularly employed by a reporting unit, who

 

is employed by a reporting unit to administer a program described

 

in subdivision (f), (h), (i), (j), or (k).

 

     (h) After September 30, 1983, a person, not regularly employed

 

by a reporting unit, who is employed by a reporting unit through

 

participation in a program established pursuant to under the former

 

job training partnership act, Public Law 97-300, 96 Stat. 1322 or

 

beginning July 1, 2000, the workforce investment act of 1998,

 

Public Law 105-220, 112 Stat. 936.

 

     (i) A person, not regularly employed by a reporting unit, who

 

is employed by a reporting unit through participation in a program

 

established pursuant to under the work first program under section

 

57f of the social welfare act, 1939 PA 280, MCL 400.57f.

 

     (j) A person, not regularly employed by a reporting unit, who

 

is employed by a reporting unit through participation in a program

 

established pursuant to under the Michigan community service corps

 

program, first established under sections 25 to 35 of 1983 PA 259.

 

     (k) A person, not regularly employed by a reporting unit, who

 

is employed by a reporting unit through participation in a program

 

established pursuant to under the older American community service

 

employment program under the older American community service

 

employment act, title V of the older Americans act of 1965, Public

 

Law 89-73, 42 USC 3056 to 3056i.

 

     (l) A person, not regularly employed by a reporting unit, who

 

is employed by a reporting unit in a temporary, intermittent, or

 

irregular seasonal or athletic position and who is under the age of

 

19 years.

 

     (m) A person, not regularly employed by a reporting unit, who

 

is employed by a reporting unit only in a temporary position to

 

assist in the conduct of a school election.

 

     (n) A qualified participant who makes a valid election under

 

section 81d 81d(1) to not become a member of Tier 1.

 

     (o) A qualified participant who is not a member of Tier 1

 

under section 81d(4).

 

     (2) "Membership service" means service performed after June

 

30, 1945.

 

     (3) "Noncontributory plan" means the plan which began between

 

July 1, 1974 and July 1, 1977, in which the reporting unit elected

 

to discontinue withholding contributions from employees'

 

compensation.

 

     (4) "Noncontributory service" means credited service rendered

 

under the noncontributory plan.

 

     (5) "Nonteacher" means a person employed by a reporting unit

 

who is not a teacher as defined in section 8(4).

 

     Sec. 81d. (1) The retirement system shall permit each

 

qualified participant who first becomes a qualified participant and

 

first works for a reporting unit on or after September 4, 2012 but

 

before July 1, 2015 to make an election to not become a member of

 

Tier 1 and become only a qualified participant in Tier 2.

 

     (2) The retirement system shall determine a method of

 

accepting elections under this subsection (1) and reporting units

 

shall secure those elections during the period beginning on the

 

date of the individual's employment and ending upon the expiration

 

of 75 days from the individual's first payroll date. An election

 

under this subsection (1) is irrevocable.

 

     (3) An individual who does not make an election under this

 

subsection for any reason on or before the close of the election

 

period is considered to have made an election to become a member of

 

Tier 1 and is subject to all of the following as of the date of his

 

or her employment:

 

     (a) He or she is eligible to accrue any service credit or

 

qualify for any retirement allowance under Tier 1 under the terms

 

as provided in section 81c.

 

     (b) He or she is also a qualified participant under Tier 2.

 

     (2) (4) An individual who makes the election under subsection

 

(1) on or before the close of the election period is considered to

 

have made an election to not become a member of Tier 1 and is

 

subject to all of the following as of the date of his or her

 

employment:

 

     (a) He or she is not eligible to accrue any service credit or

 

qualify for any retirement allowance under Tier 1 under the terms

 

as provided in section 81c.

 

     (b) He or she is only a qualified participant under Tier 2.

 

     (3) (5) The retirement system shall collect from the an

 

individual described in subsection (1) all amounts required under

 

sections 43a and 131(2) and shall collect all required employer

 

contributions required under Tier 1 from his or her date of

 

employment. If an individual makes a valid election under

 

subsection (1) to not become a member of Tier 1, the retirement

 

system shall determine and implement a method to reconcile employer

 

and employee contributions to be deposited to Tier 2, and any such

 

employee contributions will be considered to be elective

 

contributions under section 131.

 

     (4) An individual who first becomes a qualified participant

 

and first works for a reporting unit after June 30, 2015 is not a

 

member of Tier 1 and is only a qualified participant in Tier 2. An

 

individual described in this subsection is subject to all of the

 

following as of the date of his or her employment:

 

     (a) He or she is not eligible to accrue any service credit or

 

qualify for any retirement allowance under Tier 1 under the terms

 

as provided in section 81c.

 

     (b) He or she is only a qualified participant under Tier 2.

 

     Sec. 132. A qualified participant is immediately 100% vested

 

in his or her contributions made to Tier 2. A Except as otherwise

 

provided in section 133, a qualified participant shall vest vests

 

in the employer contributions made on his or her behalf to Tier 2

 

according to the following schedule:

 

     (a) Upon On completion of 2 years of service, 50%.

 

     (b) Upon On completion of 3 years of service, 75%.

 

     (c) Upon On completion of 4 years of service, 100%.

 

     Sec. 133. (1) A qualified participant who is not a Tier 1

 

member under section 81d(4) is immediately vested in his or her

 

contributions to Tier 2. A qualified participant who is not a Tier

 

1 member under section 81d(4) is immediately vested in employer

 

contributions made on his or her behalf to Tier 2.

 

     (2) A qualified participant who is not a Tier 1 member under

 

section 81d(4) may periodically elect to contribute up to 5% of his

 

or her compensation to his or her Tier 2 account. The employer of a

 

qualified participant who is not a Tier 1 member under section

 

81d(4) shall make an additional contribution to the qualified

 

participant's Tier 2 account in an amount equal to 80% of the

 

contribution made by the qualified participant under this

 

subsection.

 

     (3) A qualified participant may make contributions in addition

 

to contributions made under this section to his or her Tier 2

 

account as permitted by the department and the internal revenue

 

code.