HOUSE BILL No. 5306

 

 

November 30, 2017, Introduced by Reps. Leutheuser, Lower, Albert and Crawford and referred to the Committee on Michigan Competitiveness.

 

     A bill to amend 1937 PA 345, entitled

 

"Fire fighters and police officers retirement act,"

 

by amending section 9 (MCL 38.559), as amended by 2002 PA 98, and

 

by adding section 2a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2a. A retirement board under this act, a retirement

 

system under this act, and a city, village, or municipality that is

 

the custodian of funds of a retirement system under this act shall

 

comply with any applicable requirements under the protecting local

 

government retirement and benefits act.

 

     Sec. 9. (1) 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 and sufficient to pay the

 

normal costs of any retirement health benefits provided by the


retirement system to its members, retired members, and

 

beneficiaries in the amount required under section 4(1)(e) of the

 

protecting local government retirement and benefits act or to make

 

other payments required for the retirement system in a corrective

 

action plan under the protecting local government and retirement

 

benefits act. 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. A tax levied under this subsection must be used only by the

 

municipality levying the tax for purposes authorized under this

 

subsection and must not be attributed or transmitted to or retained

 

or captured by any other governmental entity for any other purpose.

 

     (3) 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, to retirement health benefits, to

 

any other 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.


     (7) As used in this section:

 

     (a) "Normal cost" means that term as defined in section 3 of

 

the protecting local government retirement and benefits act.

 

     (b) "Retirement health benefit" means that term as defined in

 

section 3 of the protecting local government retirement and

 

benefits act.

 

     Enacting section 1. This amendatory act does not take effect

 

unless Senate Bill No. ____ or House Bill No. 5298 (request no.

 

00251'17 *) of the 99th Legislature is enacted into law.