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HB-5760, As Passed Senate, May 16, 2006

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5760

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 2004 PA 5.

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 take place:

(a) The retirant shall not be 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).

(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.

subsection shall report such employment to the retirement system by

July 1 of each year. The report to be filed shall include the name

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

and the total annual compensation paid to the retirant.

(4) Until July 1, ~~2006~~ 2011, 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 an

approved emergency situation, not including a situation caused by a

labor dispute, that necessitates the hiring of a retirant in the

capacity of a teacher, principal, stationary engineer, or

administrator, or other category as determined by the

superintendent of public instruction to prevent depriving students

of an education. The chief executive officer or superintendent of

the school district shall include with the written notification

documentation showing that more than 8% of all classes in the

district during the 1998-99 school year are taught by full-time

substitute teachers who are not certificated in the subjects or

grade levels which they teach. Within 30 days after receipt of the

notification and documentation under this subdivision, the

department of education shall notify the chief executive officer or

superintendent and the retirement system of its approval or

disapproval of the emergency situation. If disapproved by the

department of education, this subsection does not apply.

(b) The retirant is employed under an emergency situation

described in subdivision (a) for a period not to exceed 6 years.

compensation attributable to the employment described in

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

allowance.

(5) On or before July 1, 1999, the state superintendent of

public instruction shall compile a listing of critical shortage

disciplines. This listing shall be updated annually.

(6) Until July 1, ~~2006~~ 2011, 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 (5).

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

subdivision (a) for a period not to exceed 6 years.

compensation attributable to the employment described in

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

allowance.