Bill Text: MI HB6080 | 2015-2016 | 98th Legislature | Introduced
Bill Title: Retirement; fire and police; retirement health benefits subject to the local unit of government retirement act; provide for. Amends secs. 6, 6d, 6e & 9 of 1937 PA 345 (MCL 38.556 et seq.) & adds sec. 9a. TIE BAR WITH: HB 6074'16
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-12-01 - Bill Electronically Reproduced 11/30/2016 [HB6080 Detail]
Download: Michigan-2015-HB6080-Introduced.html
HOUSE BILL No. 6080
November 30, 2016, Introduced by Rep. Poleski and referred to the Committee on Local Government.
A bill to amend 1937 PA 345, entitled
"Fire fighters and police officers retirement act,"
by amending sections 6, 6d, 6e, and 9 (MCL 38.556, 38.556d,
38.556e, and 38.559), section 6 as amended by 2003 PA 8, sections
6d and 6e as added by 1987 PA 145, and section 9 as amended by 2002
PA 98, and by adding section 9a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
6. (1) Age Subject to
section 9a, age and service
retirement benefits payable under this act are as follows:
(a) A member who is 55 years of age or older and who has 25 or
more
years of service as a police officer or fire fighter in the
employ
of the employed by a municipality affected by this act may
retire
from service upon on written application to the retirement
board stating a date, not less than 30 days or more than 90 days
after the execution and filing of the application, on which the
member desires to be retired. The retirement board shall grant the
benefits to which the member is entitled under this act, unless the
member continues employment. If the member continues employment,
the
member's pension shall must
be deferred with service years of
credit
until actual retirement. Upon On
the approval of the
legislative body or the electors of a municipality under this act,
a member under 50 years of age who has 25 or more years of service,
or without the necessity for approval, a member 50 years of age or
more who has 25 or more years of service, may leave service and
receive the full retirement benefits payable throughout the
member's life as provided in subdivision (e).
(b) A member who is 60 years of age or older shall be retired
by
the retirement board upon on
the written application of the
legislative body, or board or official provided in the charter of
the municipality as head of the department in which the member is
employed.
Upon On retirement, the retirement board shall grant the
benefits to which the member is entitled under this act, unless the
member continues employment. If the member continues employment,
the
member's pension shall must
be deferred with service years of
credit until actual retirement.
(c) A member who is 65 years of age shall be retired by the
retirement board on the first day of the month following attainment
of 65 years of age.
(d)
A member who has 10 or more years of service shall have is
vested
in retirement benefits that are not subject to forfeiture on
account
because of disciplinary action, charges, or complaints. If
the member leaves employment before the date the member would have
first become eligible to retire as provided in subdivision (a) for
any reason except the member's retirement or death, the member is
entitled
to a pension that shall begin begins
the first day of the
calendar month immediately after the month in which the member's
written application for the pension is filed with the retirement
board that is on or after the date the member would have been
eligible to retire had the member continued in employment. The
retirement board shall grant the member the benefits to which the
member is entitled under this act, unless the member resumes
service.
If the member resumes service, the member's pension shall
must be further deferred with service years of credit until the
member actually retires.
(e)
Upon On retirement from service as provided in this
subsection, a member shall receive a regular retirement pension
payable throughout the member's life of 2% of the member's average
final compensation multiplied by the first 25 years of service
credited to the member, plus 1% of the member's average final
compensation multiplied by the number of years, and fraction of a
year, of service rendered by the member in excess of 25 years. A
municipality
under this act, upon on approval of the legislative
body or the electors of the municipality, may increase the
percentage of the payment from 2% up to a maximum of 2.5%. If an
increase
is approved, the increase shall may
not be reduced for
members under the system at the time of the increase. The
legislative body may also increase the percentage of employee
contributions. If a retired member dies before the total of regular
pension payments received by the member equals the total of the
member's contributions made to the retirement system, the
difference between the member's total contributions and the total
of
the member's regular retirement pension payments received shall
must be paid in a single sum to the person or persons the member
nominates
by written designation duly executed and filed with the
retirement board. If there is not a person or persons surviving the
retired
member, the difference, if any, shall must be paid to the
retired member's legal representative or estate.
(f) As used in this section, "average final compensation"
means the average of the highest annual compensation received by a
member during a period of 5 consecutive years of service contained
within the member's 10 years of service immediately preceding the
member's retirement or leaving service. However, if so provided in
a collective bargaining agreement entered into between a
municipality under this act and the appropriate recognized
bargaining agent, average final compensation may mean the average
of the 3 years of highest annual compensation received by a member
during the member's 10 years of service immediately preceding the
member's retirement or leaving service. If the member has less than
5 years of service, average final compensation means the annual
average compensation received by the member during his or her total
years of service.
(g)
A member shall be given is
entitled to service credit for
time spent in the military, naval, marine, or other armed service
of the United States government during time of war, or other
national emergency recognized by the board, if the member was
employed by the municipality at the time of entry into the armed
service, and is or was reemployed by the municipality as a police
officer or fire fighter within 6 months after the date of
termination of his or her required enlistment or assignment in the
armed service. A municipality by a 3/5 vote of its governing body
or by a majority vote of the qualified electors may provide service
credit for not more than 6 years of active military service to the
United
States government to a member who is employed subsequent to
after
this military service upon on payment
to the retirement
system of 5% of the member's full-time or equated full-time
compensation for the fiscal year in which payment is made
multiplied by the years of service that the member elects to
purchase up to the maximum. Service is not creditable if it is or
would be creditable under any other federal, state, or local
publicly supported retirement system. However, this restriction
does not apply to those persons who have or will have acquired
retirement eligibility under the federal government for service in
the
reserve. A member shall be given is entitled to service
credit
for the time the member is absent from active service without full
pay
on account because of sickness or injury. If the absence from
active service is due to nonservice connected sickness or injury,
not
more than 60 days of the absence shall must be credited as
service in any 1 calendar year, as determined by the retirement
board.
(h) Before the effective date of the member's retirement as
provided in this subsection, but not after the effective date of
the member's retirement, a member may elect to receive his or her
benefit in a pension payable throughout the member's life, called a
regular retirement pension, or the member may elect to receive the
actuarial equivalent, computed as of the effective date of
retirement, of the member's regular retirement pension in a reduced
retirement pension payable throughout the member's life, and
nominate a survivor beneficiary, under an option provided in this
subdivision.
Upon On the death of a retirant who retires on or
after July 1, 1975, and who is receiving a regular retirement
pension,
his or her spouse, if living, shall must receive a pension
equal to 60% of the regular retirement pension the deceased
retirant
was receiving. Benefits shall must
not be paid under this
subdivision
on account because of the death of a retirant if the
member elected to receive his or her pension under an option
provided in this subdivision. As used in this subsection, "spouse"
means the person to whom the retirant was legally married on both
the effective date of retirement and the date of death. Except as
otherwise provided in this act, if a member fails to elect an
option
before the effective date of retirement, then the pension
shall
must be paid as a regular retirement pension. A member
may
elect 1 of the following options:
(i) Option I. Upon On the
death of a retired member, his or
her
reduced retirement pension shall be continued continues
throughout the life of and is paid to the person, having an
insurable interest in the retired member's life, that the member
nominated by written designation executed and filed with the
retirement board before the effective date of the member's
retirement.
(ii) Option II. Upon On the
death of a retired member, 1/2 of
his
or her reduced retirement pension shall be continued continues
throughout the life of and is paid to the person, having an
insurable interest in the retired member's life, that the member
nominated by written designation executed and filed with the
retirement board before the effective date of the member's
retirement.
(i) If a member continues in service on or after the date of
acquiring 20 years of service credit, does not have an option I
election provided for in subdivision (j) in force, and dies while
in service of the municipality before the effective date of the
member's
retirement, leaving a surviving spouse, the spouse shall
must receive a pension computed in the same manner as if the member
had retired effective the day preceding the date of the member's
death, elected option I provided for in subdivision (h), and
nominated
the spouse as survivor beneficiary. Upon On the death of
the
spouse, the pension shall terminate. terminates. A pension
shall
must not be paid under this subdivision on account because of
the
death of a member if benefits are paid under subsection (2) on
account
because of the member's death.
(j) A member who continues in service on or after the date of
acquiring 25 years of service credit may, at any time before the
effective date of the member's retirement, by written declaration
executed and filed with the board in the manner and form prescribed
by the board, elect option I provided for in subdivision (h) and
nominate
a survivor beneficiary whom the board finds to be is
dependent
upon on the member for at least 50% of the beneficiary's
support. If a member who has an option I election provided for in
this subdivision in force dies while in service before the
effective date of the member's retirement, the member's survivor
beneficiary
shall must immediately receive the same pension that
the survivor beneficiary would have been entitled to receive under
option
I if the member had retired pursuant to under this act
effective the day preceding the date of the member's death,
notwithstanding that the member may not have attained 55 years of
age. If a member who has an option I election provided for in this
subdivision
in force subsequently retires pursuant to under this
act, the member, within 90 days immediately preceding the effective
date of the member's retirement, but not after the effective date
of the member's retirement, may elect an option provided for in
subdivision
(h). The option election is effective as of on the
effective
date of the member's retirement. A pension shall must not
be
paid under this subdivision on account because of the death of a
member
if benefits are paid under subsection (2) on account because
of the member's death.
(k) If a retirant receiving a reduced retirement pension under
subdivision (h)(i) or (ii) is divorced from the spouse who had been
named the retirant's survivor beneficiary under subdivision (h)(i)
or (ii), the retirement system shall consider the election of a
reduced
retirement pension payment option shall to be considered
void
by the retirement system if the judgment of divorce or award
or order of the court, or an amended judgment of divorce or award
or order of the court, described in section 9 and dated after June
27, 1991, provides that the election of a reduced retirement
pension payment option under subdivision (h)(i) or (ii) is to be
considered void by the retirement system and the retirant provides
a certified copy of the judgment of divorce or award or order of
the court, or an amended judgment of divorce or award or order of
the court, to the retirement system. If the election of a reduced
retirement pension payment option under subdivision (h)(i) or (ii)
is considered void by the retirement system under this subsection,
the
retirant's retirement pension shall must revert to a regular
retirement pension, including postretirement adjustments, if any,
subject to an award or order of the court as described in the
public employee retirement benefit protection act, 2002 PA 100, MCL
38.1681
to 38.1689. The retirement pension shall
must revert to a
regular retirement pension under this subdivision effective the
first day of the month after the date the retirement system
receives a certified copy of the judgment of divorce or award or
order of the court. This subdivision does not supersede a judgment
of divorce or award or order of the court in effect on June 27,
1991. This subdivision does not require the retirement system to
distribute or pay retirement assets on behalf of a retirant in an
amount that exceeds the actuarially determined amount that would
otherwise become payable if a judgment of divorce had not been
rendered.
(2)
Disability Subject to
section 9a, disability and service
connected death benefits payable under this act are as follows:
(a) To a surviving spouse, a duty death pension of the same
amount each week as that which has been paid the surviving spouse
under the worker's disability compensation act of 1969, 1969 PA
317,
MCL 418.101 to 418.941, to become is due and payable on the
termination of the payments to the surviving spouse by a
municipality under the worker's disability compensation act of
1969,
1969 PA 317, MCL 418.101 to 418.941, and to must continue
for
the surviving spouse's life.
(b)
If death results to a member dies
in the line of duty, and
the
member leaves surviving children, the children shall must be
paid a pension of the same amount as that which has been paid to
them as a weekly benefit under the worker's disability compensation
act of 1969, 1969 PA 317, MCL 418.101 to 418.941, to become due and
payable
upon on termination of the payments under the worker's
disability compensation act of 1969, 1969 PA 317, MCL 418.101 to
418.941,
and to must continue to each surviving child until he or
she attains 18 years of age, or until his or her marriage or death
before attaining 18 years of age.
(c)
If death results to a member dies
in the line of duty and
the
member leaves other surviving dependents, the dependents shall
must receive a pension of the same amount as that which has been
paid to them as a weekly benefit under the worker's disability
compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941, to
become
due and payable upon on termination of the payments under
the worker's disability compensation act of 1969, 1969 PA 317, MCL
418.101
to 418.941, and to must continue until the time the
retirement board determines that the need for a pension no longer
exists.
(d)
Upon On the application of a member or the member's
department head, a member who becomes totally incapacitated for
duty
by reason because of a personal injury or disease occurring as
the natural and proximate result of causes arising out of and in
the course of the member's employment by the municipality shall be
retired
by the retirement board. The member shall must be given a
medical examination by a medical committee consisting of a
physician named by the retirement board, a physician named by the
member claiming benefits, and a third physician designated by the
first 2 physicians named. The medical committee, if determined by a
majority opinion, shall certify in writing that the member is
mentally or physically incapacitated for the further performance of
duty as a police officer or fire fighter in the service of the
municipality; that the incapacity is likely to be permanent; and
that
the member should be retired. Upon On retirement for
disability as provided in this subdivision, a member who has not
attained
55 years of age shall must
receive a disability retirement
pension
of 50% of the member's average final compensation, which
shall
be determined according to under subsection
(1)(f), and shall
be
payable until the member becomes 55
years of age. Upon On
becoming
55 years of age, the disabled member shall must receive
a
disability
retirement pension computed according to under
subsection (1)(e). In computing the disability retirement pension,
the
member shall be given is
entitled to service credit for the
period of receipt of a disability retirement pension before
attainment of 55 years of age. If a member retired after attaining
55
years of age on account because
of disability, as provided in
this
subdivision, the member shall must
receive a disability
retirement
pension computed according to under
subsection (1)(e),
notwithstanding that the member may not have 25 years of service
credit. The disability retirement pension provided for in this
subdivision is subject to subdivisions (f) and (g).
(e)
Upon On the application of a member or the member's
department head, a member in service who has 5 or more years of
service credit and who becomes totally and permanently
incapacitated
for duty by reason because
of a personal injury or
disease occurring as the result of causes arising outside the
course of the member's employment by the municipality may be
retired
by the retirement board. The member shall must be given a
medical examination by a medical committee consisting of a
physician named by the retirement board, a physician named by the
member claiming benefits, and a third physician designated by the
first 2 physicians named. The medical committee, if determined by a
majority opinion, shall certify in writing that the member is
mentally or physically incapacitated for the further performance of
duty as a police officer or fire fighter in the service of the
municipality, that the incapacity is likely to be permanent, and
that
the member should be retired. Upon On retirement for
disability, as provided in this subdivision, a member who has not
attained
55 years of age shall must
receive a disability retirement
pension until the member becomes 55 years of age, recovers, or
dies, whichever occurs first, of 1.5% of the member's average final
compensation multiplied by the number of years of service credited
to
the member. Upon On becoming 55 years of age, the member's
disability
retirement pension shall must
be increased to 2% of the
member's average final compensation multiplied by the number of
years of service credited to the member at the time of his or her
retirement.
Upon On retirement for disability as provided in this
subdivision,
a member who is 55 years of age or older shall must
receive a disability retirement pension computed according to
subsection (1)(e). This subdivision is subject to subdivisions (f)
and (g).
(f) At least once each year during the first 5 years after the
retirement of a member with a disability retirement pension and at
least once in every 3-year period after disability retirement, the
retirement
board may, and upon on the retired member's application
shall, require a retired member who has not attained 55 years of
age
to undergo a medical examination. The medical examination shall
must be given by or under the direction of a physician, designated
by the retirement board, at the place of residence of the retired
member or other place mutually agreed upon. If a retired member who
has not attained 55 years of age refuses to submit to the medical
examination in the period, the member's disability retirement
pension may be discontinued by the retirement board. If the
member's refusal continues for 1 year, all the member's rights to
his or her disability retirement pension may be revoked by the
retirement
board. If upon on a medical examination of the retired
member the physician reports to the retirement board that the
retired member is physically capable of resuming employment in the
classification held by the member at the time of retirement, the
member
shall must be restored to active service in the employ of
employed by the municipality and payment of the disability
retirement
pension shall must cease if the report of the physician
is concurred in by the retirement board. A retired member restored
to
active service shall must again become a member of the
retirement system from the date of return to service. The member
shall contribute to the retirement system after restoration to
active service in the same manner as before the member's disability
retirement. Service credited to the member at the time of
disability
retirement shall must be restored to full effect. The
member
shall be given is entitled
to service credit for the period
the member was receiving a duty disability retirement pension
provided
for in subdivision (d), but shall is not be given entitled
to service credit for the period the member was receiving a nonduty
disability retirement pension provided for in subdivision (e).
Amounts paid under the worker's disability compensation act of
1969, 1969 PA 317, MCL 418.101 to 418.941, to a retired member
shall
must be offset against and payable in place of benefits
provided under this act. If the benefits under the worker's
disability compensation act of 1969, 1969 PA 317, MCL 418.101 to
418.941, are less than the benefits payable under this act, the
amount
to be paid out of the funds of the retirement system shall
must be the difference between the benefits provided under the
worker's disability compensation act of 1969, 1969 PA 317, MCL
418.101
to 418.941, and the benefits provided in this act. Upon On
the termination of benefits under the worker's disability
compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941, the
benefits
shall must be paid pursuant to under this
act.
(g) Within 60 days before a member becomes 55 years of age, or
before retirement from service if retirement occurs after the
member becomes 55 years of age, a disabled member who is retired as
provided in subdivision (d) or (e) may elect to continue to receive
a disability retirement pension as a benefit terminating at death,
to be known as a regular disability pension, or may elect to
receive the actuarial equivalent, at that time, of a regular
disability pension in a reduced disability pension payable
throughout
life pursuant to under an option provided in subsection
(1)(h). If a disabled member fails to elect an option, as provided
in this subdivision, before becoming 55 years of age or before
retirement,
the member's retirement pension shall must be paid to
the member as a regular disability pension terminating at death. If
a disabled member who has not elected an option provided in
subsection (1)(h) dies before the total of the member's regular
disability pension payments received equals or exceeds the total of
the member's contributions made to the retirement system, the
remainder,
if any, shall must be paid in a single sum to the person
or
persons nominated by the member by written designation duly
executed and filed with the board. If there is not a designated
person
or persons surviving, then the remainder, if any, shall must
be paid to the retired member's legal representative or estate.
Sec.
6d. A Subject to section
9a, a municipality, by ordinance
or in another manner provided by law, may adopt from time to time
benefit programs providing for postretirement adjustments
increasing
retirement benefits. Such Subject
to section 9a, the
benefit programs may provide for 1-time postretirement percentage
increases in retirement benefits; annual or other periodic
postretirement percentage increases in retirement benefits; lump
sum postretirement distributions; or any other method considered
appropriate
by the municipality. The Subject
to section 9a, the
retirement
benefit payable after making an adjustment pursuant to
under
the benefit program adopted shall must be
the new retirement
benefit payable until the next adjustment, if any, is made.
Sec. 6e. Notwithstanding any other provisions of this act, any
matter relating to the retirement system provided by this act,
including, but not limited to, postretirement adjustment increases,
applicable to current employees represented by a collective
bargaining
agent is a mandatory subject of bargaining under the
public
employment relations act, Act No. 336 of the Public Acts of
1947,
being sections 423.201 to 423.216 of the Michigan Compiled
Laws.to 1947 PA 336, MCL 423.201 to 423.217.
Sec.
9. (1) The Subject to
section 9a, the contributions of a
member
to the retirement system shall must
be 5% of the salary paid
to the member by the municipality. The officer responsible for
making up the payroll shall cause the contributions provided for in
this subsection to be deducted from the salary of each member on
each
payroll for each payroll period so long as while he
or she
remains
an active member in the employ of employed by the
municipality.
The amounts deducted shall must
be paid into the
funds of the retirement system. The members' contributions provided
for
in this act shall must be made notwithstanding that the minimum
salary provided for by law is changed by the members'
contributions.
Every A member shall be is considered
to consent and
to agree to the deductions made and provided for in this act and
shall receipt for his or her full salary and payment of his or her
salary less the deduction, which is a full and complete discharge
and acquittance of all claims and demands for the services rendered
by the member during the period covered by the payment, except as
to benefits provided by this retirement system.
(2) For the purpose of creating and maintaining a fund for the
payment of the pensions and other benefits payable as provided in
this act, the municipality, subject to the provisions of this act,
shall appropriate, at the end of such regular intervals as may be
adopted, quarterly, semiannually, or annually, an amount sufficient
to maintain actuarially determined reserves covering pensions
payable
or that might be payable on account because of service
performed and to be performed by active members, and pensions being
paid to retired members and beneficiaries. The appropriations to be
made
by the municipality in any fiscal year shall must be
sufficient to pay all pensions due and payable in that fiscal year
to all retired members and beneficiaries. The amount of the
appropriation
in a fiscal year shall must
not be less than 10% of
the aggregate pay received during that fiscal year by members of
the retirement system unless, by actuarial determination, it is
satisfactorily established that a lesser percentage is needed. All
deductions
and appropriations shall must
be payable to the
treasurer of the municipality and he or she shall pay the
deductions and appropriations into the retirement system. Except in
municipalities that are subject to the 15 mill tax limitation as
provided by section 6 of article IX of the state constitution of
1963, the amount required by taxation to meet the appropriations to
be
made by municipalities under this act shall must be
in addition
to
any tax limitation imposed upon on
tax rates in those
municipalities by charter provisions or by state law subject to
section 25 of article IX of the state constitution of 1963.
(3)
If, Subject to section 9a,
if, at the beginning or during
any
fiscal year, it has been satisfactorily determined by the
retirement board determines that the accumulated funds of the
retirement system plus the municipality's contribution of 10% of
the aggregate pay received during that fiscal year by members of
the retirement system plus members' contributions of 5% of payroll,
are insufficient to pay all pensions and other benefits due and
payable
in that year out of funds of the retirement system, then
all
pensions and other benefits payable shall must be prorated for
the remainder of the fiscal year by the retirement board.
(4) Any clerical, legal, actuarial, or medical expenses
required by the retirement board, or any other necessary expense
for the operation of the retirement system, shall be provided for
by the municipality or shall be paid from the investment income of
the retirement system, as determined by the governing body of the
municipality. The retirement board shall submit expenses
periodically to the governing body of the municipality. If use of
investment income to pay these expenses causes an actuarial
insufficiency in the assets of the retirement system used to pay
pensions,
the municipality shall make up the insufficiency. shall
be
made up by the municipality.
(5) All pensions allowed and payable to retired members and
beneficiaries
under this act shall become are
obligations of and
must be payable from the funds of the retirement system.
(6)
The right of a person an
individual to a pension, to the
return of member contributions, or to any optional benefits, or any
other right accrued or accruing to a member or beneficiary under
this act, and the money belonging to the retirement system is
subject to the public employee retirement benefit protection act,
2002 PA 100, MCL 38.1681 to 38.1689.
Sec. 9a. A retirement system under this act is subject to the
local unit of government retirement act.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. ____ or House Bill No. 6074 (request no.
06264'16 *) of the 98th Legislature is enacted into law.
