PSERS: POSTRETIREMENT
EARNINGS - H.B. 4340 (S-1): FLOOR
Sponsor: Representative Bruce Caswell
House Committee: Senior Health, Security, and Retirement
CONTENT
The bill would amend the Public School Employees Retirement Act to allow retirants who retired by July 1, 2003, rather than July 1, 2000, to be rehired by a “reporting unit” experiencing an emergency situation or needing to hire a retirant in a critical shortage discipline, without a reduction in the retirants retirement allowance; and to increase the maximum period of re-employment from three to six years. (A “reporting unit” is a public school district, intermediate school district, public school academy, tax-supported community or junior college, or university, or an agency employing members of the retirement system.)
Under the Act, retirants from the Public School Employees Retirement System (PSERS) who are re-employed by a reporting unit are not entitled to a new final average compensation or additional service credit for their postretirement work, unless they perform the equivalent of at least five years of additional service (or three years, if a retirant has contributed to the member investment plan). Also, retirants’ allowances must be reduced when their new earnings exceed either one-third of their final average compensation, or the maximum earnings permitted under the Social Security Act; the retirants’ allowances are reduced by the full amount that their earnings exceed the lesser of the two calculations.
The Act makes an exception to these limitations, however, for a retirant who is employed for three years or less by a reporting unit experiencing an Aemergency situation@, which means that more than 8% of all classes in the district during the 1998-99 school year were taught by uncertified, full-time substitute teachers. Also, the limitations do not apply to a retirant hired in an area identified by the State Superintendent of Public Instruction as a Acritical shortage discipline@. In either case, the retirant may not use the service or compensation for a recomputation of his or her retirement allowance; the exceptions apply only until July 1, 2006; and the retirant may not be employed for more than three years.
These exceptions currently are available only for PSERS members who retired on or before July 1, 2000. The bill would extend the exceptions to those who retired on or before July 1, 2003, and allow the retirant to work under these exemptions for up to six years.
MCL 38.1361 & #160; ; 0; Legislative Analyst: Claire Layman
FISCAL IMPACT
The bill would have no fiscal impact on State or local government.
Date Completed: 1-16-04 Fiscal Analyst: Joe Carrascofloor\hb4340 (S-1) Analysis available @ http://www.michiganlegislature.org
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.