Bill Text: MI SB0727 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Retirement; public school employees; defined contribution only for employees hired after certain date; provide for. Amends secs. 5 & 81d of 1980 PA 300 (MCL 38.1305 & 38.1381d) & adds sec. 133.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-12-12 - Referred To Committee On Appropriations [SB0727 Detail]
Download: Michigan-2013-SB0727-Introduced.html
SENATE BILL No. 727
Introduced by Senator JANSEN.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending sections 5 and 81d (MCL 38.1305 and 38.1381d), section
5 as amended and section 81d as added by 2012 PA 300, 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, 2014 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 on or after July 1, 2014 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. 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.
