HOUSE BILL No. 5310

 

 

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

 

     A bill to amend 1984 PA 427, entitled

 

"Municipal employees retirement act of 1984,"

 

by amending section 36 (MCL 38.1536), as amended by 2004 PA 490,

 

and by adding section 41a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 36. (1) A retirement board is created to administer this

 

act. Before the certification date, August 15, 1996, the retirement

 

board shall operate within the department of management and budget.

 

On and after the certification date, After August 14, 1996, the

 

retirement system shall become is a public corporation and shall no

 

longer does not operate within the executive branch of this state.

 

     (2) On and after the certification date, After August 14,

 

1996, except as otherwise provided in section 41a and subject to

 

the protecting local government retirement and benefits act, the

 

retirement board has all of the following powers and duties:


     (a) The retirement board shall determine and establish all of

 

the provisions of the retirement system affecting benefit

 

eligibility, benefit programs, contribution amounts, and the

 

election of municipalities, judicial circuit courts, judicial

 

district courts, and judicial probate courts to be governed by the

 

provisions of the retirement system. The retirement board shall

 

establish all retirement system provisions. As of 12:01 a.m. on the

 

certification date, August 15, 1996, the retirement system

 

provisions shall must not differ materially from the defined

 

benefit provisions that are in effect under this act at 11:59 p.m.

 

on the day immediately before the certification date. August 14,

 

1996. This subdivision does not limit the retirement board's

 

authority after the certification date August 15, 1996 to establish

 

additional programs, including, but not limited to, defined

 

benefit, defined contribution, ancillary benefits, health and

 

welfare benefits, and other postemployment benefit programs. The

 

retirement board may adopt the provisions of the reciprocal

 

retirement act, 1961 PA 88, MCL 38.1101 to 38.1106, on behalf of

 

the employees of the retirement board.

 

     (b) The retirement board has the full and exclusive authority

 

and full responsibility to employ and pay for all professional

 

services, including, but not limited to, actuarial, investment,

 

legal, accounting, and any other services that the retirement board

 

considers necessary for the proper operation of the retirement

 

system. The power granted to the retirement board in this

 

subdivision includes complete control of the procurement process.

 

     (c) The retirement board shall appoint a chief executive


officer and any other employees for which the retirement board

 

establishes positions. The retirement board shall establish the

 

compensation of all persons appointed by the board. On and after

 

the certification date, After August 14, 1996, a person employed by

 

the public corporation is not an employee of this state. for any

 

purpose.

 

     (d) The retirement board shall arrange for an annual actuarial

 

valuation and report of the actuarial soundness of each

 

participating municipality and court to be prepared by an

 

independent actuary based upon on data compiled and supplied by

 

employees of the retirement system. The retirement board shall

 

adopt actuarial tables, assumptions, and formulas after

 

consultation with the actuary.

 

     (e) The retirement board shall arrange for annual audits of

 

the records and accounts of the retirement system by a certified

 

public accountant or by a firm of certified public accountants

 

pursuant to under generally accepted auditing standards and the

 

uniform budgeting and accounting act, 1968 PA 2, MCL 141.421 to

 

141.440a.

 

     (f) The retirement board shall prepare an annual report for

 

each fiscal year in compliance with generally accepted accounting

 

principles. The report shall contain must include information

 

regarding the financial, actuarial, and other activities of the

 

retirement system during the fiscal year. The retirement board

 

shall furnish a copy of the annual report to the governor and a

 

copy in print or electronic format to each house of the

 

legislature, each participating municipality, and each


participating court. The retirement board shall make the report

 

available to all members upon on request. The report shall must

 

also contain include a review of the actuarial valuation required

 

under subdivision (d), if available.

 

     (g) The retirement board shall appoint an attorney to be the

 

legal advisor of the board and to represent the board in all

 

proceedings.

 

     (h) The retirement board shall appoint or employ custodians of

 

the assets of the retirement system. The custodians shall perform

 

all duties necessary and incidental to the custodial responsibility

 

and make disbursements of authorized retirement system payments

 

from the funds of the retirement system.

 

     (i) The retirement board shall perform other functions that

 

are required for the execution of the provisions of this act.

 

     (j) The retirement board shall establish the time and location

 

of the meetings of the retirement board and the time and location

 

of the annual meeting of the retirement system, consistent with the

 

provisions of the open meetings act, 1976 PA 267, MCL 15.261 to

 

15.275.

 

     (3) Before the certification date, August 15, 1996, the

 

provisions of the executive organization act of 1965, 1965 PA 380,

 

MCL 16.101 to 16.608, and the management and budget act, 1984 PA

 

431, MCL 18.1101 to 18.1594, shall govern the administrative

 

functions of the retirement system. However, any provision of law

 

in actual conflict with the provisions of the amendatory act that

 

added this sentence shall 1996 PA 220 does not apply.

 

     (4) On and after the certification date, After August 14,


1996, the retirement board consists of the following 9 members,

 

each of whom, excepting the retiree member and the retirement board

 

appointees, shall must be from a different county at the time of

 

appointment:

 

     (a) Two members appointed by the retirement board who have

 

knowledge or experience in retirement systems, administration of

 

retirement systems, or investment management or advisory services.

 

     (b) One member who is a retiree of the system appointed by the

 

board.

 

     (c) Three members of the retirement system who are officers of

 

participating municipalities or courts, who shall must be

 

designated as officer board members.

 

     (d) Three employee members of the retirement system who are

 

not officers of a participating municipality or court, who shall

 

must be designated as employee board members.

 

     (5) The retirement board shall adopt its own rules of

 

procedure and shall keep a record of its proceedings. Five members

 

of the retirement board shall constitute a quorum at any a meeting

 

of the retirement board and at least 5 concurring votes shall be

 

are necessary for any decision by the retirement board. Each member

 

of the retirement board shall be is entitled to 1 vote on each

 

question before the retirement board.

 

     (6) The regular term of office of members of the retirement

 

board is 3 years. Each member of the retirement board shall take an

 

oath of office before assuming the duties of the position. Members

 

of the retirement board shall serve without compensation with

 

respect to their duties, but shall must be reimbursed by the


retirement system for their actual and necessary expenses incurred

 

in the performance of their duties. A participating municipality or

 

court employing a member of the retirement board shall treat

 

absences from work on account because of retirement board business

 

in such a manner that the individual does not suffer loss of pay or

 

benefits.

 

     (7) A vacancy shall occur occurs on the retirement board upon

 

on the occurrence of any of the following events:

 

     (a) An officer board member ceases to be eligible for

 

nomination as an officer board member.

 

     (b) An employee board member ceases to be eligible for

 

nomination as an employee board member.

 

     (c) Failure to attend 3 consecutive scheduled meetings of the

 

retirement board, unless excused for cause by majority vote of the

 

board members attending the meeting.

 

     (8) A The retirement system board shall fill a vacancy

 

occurring on the retirement board at least 120 days before the

 

expiration of a term of office. shall be filled by the retirement

 

board. Board appointments under this subsection shall be are for

 

the period ending on the December 31 next following the date of the

 

vacancy. For the officer board members and employee board members,

 

a replacement for any further portion of the unexpired term shall

 

must be filled pursuant to under section 45. For the 2 appointed

 

board members and the retiree board member, a replacement for any

 

further portion of the unexpired term shall must be filled pursuant

 

to under subsection (4).

 

     (9) The retirement board shall select from its members a


chairperson and a chairperson pro-tem.

 

     (10) The retirement board shall employ a chief executive

 

officer. The chief executive officer shall do all of the following:

 

     (a) Manage and administer the retirement system under the

 

supervision and direction of the retirement board.

 

     (b) Invest the assets of the retirement system, as directed by

 

the retirement board, consistent with the public employee

 

retirement system investment act, 1965 PA 314, MCL 38.1132 to

 

38.1140m, which act governs the investment of assets of public

 

employee retirement systems.38.1141.

 

     (c) Annually prepare and submit to the retirement board for

 

review, amendment, and adoption an itemized budget showing the

 

amount required to pay the retirement system's expenses for the

 

following fiscal year.

 

     (d) Perform other duties as the retirement board , in its

 

discretion, shall delegate delegates to the chief executive

 

officer.

 

     Sec. 41a. (1) By majority vote of its governing body, a

 

participating municipality may revoke its election to be governed

 

by the provisions of the retirement system. a participating

 

municipality may revoke its election for all members in a plan, or

 

for any division, subset, or collective bargaining unit of the

 

municipality.

 

     (2) If a participating municipality takes an action described

 

in subsection (1), the participating municipality shall select an

 

actuary to prepare an actuarial analysis using actuarial standards

 

of practice adopted by the actuarial standards board. The actuarial


analysis must include an analysis of the participating

 

municipality's contribution requirements associated with a

 

revocation of participation. Subject to section 20m of the public

 

employee retirement system investment act, 1965 PA 314, MCL

 

38.1140m, the actuary may use 1 or more actuarial methods or

 

alternative amortization periods, or both, that are consistent with

 

actuarial standards of practice adopted by the actuarial standards

 

board. The participating municipality shall select and approve a

 

methodology or amortization period, or both, to be used to

 

determine the participating municipality's contribution

 

requirement. The actuary shall not change other assumptions without

 

the approval of the retirement system. The retirement system shall

 

pay the cost of actuarial analysis from plan assets.

 

     (3) A participating municipality that takes an action

 

described in subsection (1) is responsible for funding its

 

contribution requirements as determined under subsection (2) and

 

section 24 of article IX of the state constitution of 1963.

 

     (4) The retirement system shall not require a participating

 

municipality that takes an action described in subsection (1) to

 

participate in another retirement plan administered by the

 

retirement system as a condition for a participating municipality

 

to take an action described in subsection (1).

 

     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.