SENATE BILL No. 907

 

 

April 23, 2014, Introduced by Senators CASWELL, JONES and NOFS and referred to the Committee on Reforms, Restructuring and Reinventing.

 

 

 

     A bill to amend 1980 PA 300, entitled

 

"The public school employees retirement act of 1979,"

 

by amending section 61 (MCL 38.1361), as amended by 2012 PA 464.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 61. (1) Except as otherwise provided in this section, if

 

a retirant is receiving a retirement allowance other than a

 

disability allowance payable under this act or under former 1945 PA

 

136, on account of either age or years of personal service

 

performed, or both, and becomes employed by a reporting unit, the

 

following shall occur:

 

     (a) The retirant is not entitled to a new final average

 

compensation or additional service credit under this retirement

 

system unless additional service is performed equivalent to 5 or

 


more years of service credit or, if the retirant has contributed to

 

the member investment plan, the equivalent of 3 or more years of

 

service credit. The retirant may elect to have the retirement

 

allowance recomputed based on the added credit or the final average

 

compensation resulting from the added service, or both. A

 

retirement allowance shall not be recomputed until the retirant

 

pays into the retirement system an amount equal to the retirant's

 

new final average compensation multiplied by the percentage

 

determined under section 41(2) for normal cost and unfunded

 

actuarial accrued liabilities, not including the percentage

 

required for the funding of health benefits, multiplied by the

 

total service credit in the period in which the retirant's

 

additional service was performed.

 

     (b) The retirant's retirement allowance shall be reduced by

 

the lesser of the amount that the earnings in a calendar year

 

exceed the amount permitted without a reduction of benefits under

 

the social security act, chapter 531, 49 Stat. 620, or 1/3 of the

 

retirant's final average compensation. For purposes of computing

 

allowable earnings under this subdivision, the final average

 

compensation shall be increased by 5% for each full year of

 

retirement.

 

     (2) The retirement system may offset retirement benefits

 

payable under this act against amounts owed to the retirement

 

system by a retirant or retirement allowance beneficiary.

 

     (3) Subsection (1) does not apply to a retirant if all of the

 

following circumstances exist:

 

     (a) The retirant is a former teacher or administrator employed

 


in a teaching or research capacity by a university that is

 

considered a reporting unit for the limited purpose described in

 

section 7(3). A university that employs a retirant under this

 

subsection shall report that employment to the retirement system by

 

July 1 of each year. The university shall include in the report the

 

name of the retirant, the capacity in which the retirant is

 

employed, and the total annual compensation paid to the retirant.

 

     (b) The retirant is not eligible to use any service or

 

compensation attributable to the employment described in

 

subdivision (a) for a recomputation of his or her retirement

 

allowance.

 

     (4) The state superintendent of public instruction shall

 

compile a listing of critical shortage disciplines. This listing

 

shall be updated annually.

 

     (5) Until July 1, 2014, 2016, subsection (1) does not apply to

 

a retirant if all of the following circumstances exist:

 

     (a) The retirant is employed by a reporting unit that has a

 

situation, not including a situation caused by a labor dispute,

 

that necessitates the hiring of a retirant in an area that has been

 

identified by the state superintendent of public instruction as a

 

critical shortage discipline pursuant to subsection (4).

 

     (b) The retirant is employed under any situation described in

 

subdivision (a) for a period not to exceed 3 years for that

 

retirant.

 

     (c) The retirant is not eligible to use any service or

 

compensation attributable to the employment described in

 

subdivision (a) for a recomputation of his or her retirement

 


allowance.

 

     (d) The reporting unit shall pay 100% of the contribution

 

rates for the unfunded actuarial accrued liability for retiree

 

health care and the unfunded actuarial accrued liability for

 

pension to the retirement system for each retirant who becomes

 

employed by a reporting unit under this subsection.

 

     (6) Subsection (5) shall only apply for retirants who have

 

been retired for at least 12 months before becoming employed under

 

this section.

 

     (7) Notwithstanding any other provision of this act to the

 

contrary, for a retirant who retires on or after July 1, 2010, and

 

following a bona fide termination, including not working in the

 

month of the retirant's retirement effective date, and who becomes

 

employed by a reporting unit and the retirant's amount of earnings

 

in a calendar year exceeds 1/3 of the retirant's final average

 

compensation, the retirant shall forfeit his or her retirement

 

allowance and the retirement system subsidy for health care

 

benefits from the retirement system for as long as the retirant is

 

employed at the reporting unit unless the retirant is employed

 

under subsection (5), (9), or (10). A retirant who has forfeited

 

the retirement system subsidy for health care benefits under this

 

subsection and who wants to retain health care benefits shall pay

 

the retirant's and retirement system's costs for the health care

 

benefits. Upon termination of employment at the reporting unit, the

 

retirement allowance and health care benefits shall resume without

 

recalculation.

 

     (8) Notwithstanding any other provision of this act to the

 


contrary, for a retirant who retires on or after July 1, 2010, who

 

performs core services at a reporting unit as determined by the

 

retirement system, but who is employed by an entity other than the

 

reporting unit or is an independent contractor, the retirant shall

 

forfeit his or her retirement allowance and the retirement system

 

subsidy for health care benefits from the retirement system for as

 

long as the retirant is performing core services at the reporting

 

unit, unless the retirant is employed under subsection (9) or (10).

 

A retirant who has forfeited the retirement system subsidy for

 

health care benefits under this subsection and who wants to retain

 

health care benefits shall pay the retirant's and retirement

 

system's costs for the health care benefits. Upon termination of

 

services at the reporting unit, the retirement allowance and health

 

care benefits shall resume without recalculation.

 

     (9) Until July 1, 2014, 2016, subsection (1) does not apply to

 

a retirant who retires on or after July 1, 2010; who following a

 

bona fide termination, including not working in the month of his or

 

her retirement effective date, becomes employed as a substitute

 

teacher by a reporting unit, by an entity other than the reporting

 

unit, or as an independent contractor; and whose amount of earnings

 

attributable to employment by or at a reporting unit in a calendar

 

year does not exceed 1/3 of his or her final average compensation.

 

A retirant described in this subsection is not eligible to use any

 

service or compensation attributable to the employment described in

 

this subsection for a recomputation of his or her retirement

 

allowance. The reporting unit at which the retirant provides

 

substitute teacher services described in this subsection shall pay

 


100% of the contribution rates for the unfunded actuarial accrued

 

liability for retiree health care and the unfunded actuarial

 

accrued liability for pension to the retirement system for the

 

employment described in this subsection. The reporting unit shall

 

report the engagement of substitute teachers to the retirement

 

system at the same interval the reporting unit reports information

 

to the retirement system with regard to its other employees. The

 

reporting unit shall include in the report the name of the

 

substitute teacher and the total earnings paid to the substitute

 

teacher for that reporting period. In order to comply with the

 

reporting requirements of this subsection, a reporting unit that

 

engages substitute teachers through an entity other than a

 

reporting unit or as independent contractors shall obtain from the

 

substitute teacher's employer a list of all substitute teachers the

 

employer supplies to that reporting unit and the total earnings

 

paid to each substitute teacher for the reporting period. An

 

employer other than a reporting unit that employs substitute

 

teachers as described in this subsection shall provide to the

 

reporting unit all information that the reporting unit is required

 

to report to the retirement system under this subsection. For the

 

purposes of this subsection, an employer includes an independent

 

contractor.

 

     (10) Until July 1, 2014, subsection (1) does not apply to a

 

retirant who retires on or after July 1, 2010; who following a bona

 

fide termination, including not working in the month of his or her

 

retirement effective date, becomes employed as an instructional

 

coach or a school improvement facilitator by an entity other than

 


the reporting unit or as an independent contractor; and whose

 

amount of earnings attributable to employment at a reporting unit

 

in a calendar year does not exceed 1/3 of his or her final average

 

compensation. A retirant described in this subsection is not

 

eligible to use any service or compensation attributable to the

 

employment described in this subsection for a recomputation of his

 

or her retirement allowance. The reporting unit at which the

 

retirant provides the services described in this subsection shall

 

pay 100% of the contribution rates for the unfunded actuarial

 

accrued liability for retiree health care and the unfunded

 

actuarial accrued liability for pension to the retirement system

 

for the employment described in this subsection. The reporting unit

 

shall report the engagement of instructional coaches or school

 

improvement facilitators to the retirement system at the same

 

interval the reporting unit reports information to the retirement

 

system with regard to its other employees. The reporting unit shall

 

include in the report the name of the instructional coach or school

 

improvement facilitator and the total earnings paid to the coach or

 

facilitator for that reporting period. In order to comply with the

 

reporting requirements of this subsection, a reporting unit shall

 

obtain from the coach's or facilitator's employer a list of all

 

instructional coaches and school improvement facilitators the

 

employer supplies to that reporting unit and the total earnings

 

paid to each coach or facilitator for the reporting period. An

 

employer other than a reporting unit that employs instructional

 

coaches or school improvement facilitators as described in this

 

subsection shall provide to the reporting unit all information that

 


the reporting unit is required to report to the retirement system

 

under this subsection. For the purposes of this subsection, an

 

employer includes an independent contractor. As used in this

 

subsection, "instructional coach" and "school improvement

 

facilitator" mean those terms as used in the listing of critical

 

shortage disciplines developed by the state superintendent of

 

public instruction under subsection (4).