SB-1017, As Passed Senate, September 12, 2006
SUBSTITUTE FOR
SENATE BILL NO. 1017
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending sections 75, 85, and 91 (MCL 38.1375, 38.1385, and
38.1391), section 75 as amended by 1989 PA 194, section 85 as
amended by 2002 PA 94, and section 91 as amended by 2004 PA 117.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 75. (1) A member who left or leaves service as a public
school
employee; for purposes of maternity or paternity or child
rearing,
and returns to service as a public school employee, or a
person
performing out of system public education service who leaves
that
service for purposes of maternity, paternity, or child rearing
and
who subsequently becomes a member of this retirement system,
without
other intervening employment of more than 20 hours per week
for
each week for which service credit is claimed, may purchase
service
credit for the time period or periods during which the
person
was separated from service as a public school employee or
during
which the person was separated from performing out of system
public
education service because of maternity or paternity or child
rearing,
upon request and payment to the retirement system of the
actuarial
cost. The total service credited under this section shall
not
exceed 5 years. A member requesting purchase of service credit
under
this section shall certify to the board the purpose for which
the
member took leave and was separated from service as a public
school
employee. who left or leaves
out-of-system public education
service; or a member of the state employees' retirement system
under section 13 of the state employees' retirement act, 1943 PA
240, MCL 38.13, who left or leaves service as a state employee for
purposes of parental leave who subsequently becomes a member of
this retirement system without other intervening employment of more
than 20 hours per week for each week for which service credit was
claimed may purchase service credit for the time period or periods
during which the person was separated from service because of
parental leave if the member satisfies the requirements of this
section. The member shall submit an application as described in
subsection (5) and shall pay the actuarial cost to the retirement
system. The total service credited under this section shall not
exceed 5 years. A member requesting purchase of service credit
under this section shall certify to the retirement system the
purpose for which the member took leave or was separated from
service as a public school employee; a person performing out-of-
system public education service; or a member of the state
employees' retirement system under section 13 of the state
employees' retirement act, 1943 PA 240, MCL 38.13.
(2) Service credit purchased under this section may not be
used to satisfy the minimum of 10 years of service credit required
to receive a retirement allowance under this act.
(3) If a member who made payment under this section dies and a
retirement allowance beneficiary has not been designated, or if the
member leaves reporting unit service before his or her retirement
becomes effective, the payment made by the member shall be refunded
upon request to the member or to the member's refund beneficiary.
(4) A member who reduces hours of employment with a reporting
unit
for purposes of maternity, paternity, or child rearing
parental leave or a person who reduces hours of out of system
public
education service for purposes of
maternity, paternity, or
child
rearing parental leave and who subsequently becomes a member
of this retirement system may purchase service credit for those
hours by which employment was reduced if all other requirements of
this section are met.
(5) A member requesting purchase of service credit under this
section shall submit an application as prescribed by the retirement
system in which the member shall certify the time period claimed
for parental leave and the purpose of the parental leave. If the
request for purchase of service credit under this section is a
result of leave taken to care for the member's child by birth or
adoption, then the member also shall submit a certified copy of a
birth certificate or adoption document from the appropriate court
of jurisdiction.
(6) Parental leave is creditable under this act until the
child, by birth or adoption, attains age 18 or is married,
whichever occurs first.
(7) As used in this section, "parental leave" means either of
the following:
(a) The presence of the member in the active participation or
supervision in the day-to-day, ongoing care or maintenance of his
or her child by birth or adoption, for which the member reduced or
eliminated the number of hours worked for the state, in out-of-
system public education service, or for the reporting unit in a
normal work time period.
(b) A member's pregnancy that occurred while a member, whether
brought to full term or not, childbirth, and recuperation, for
which the member reduced or eliminated the number of hours worked
for the state, in out-of-system public education service, or for
the reporting unit in a normal work time period.
Sec. 85. (1) A retiring member or retiring deferred member who
meets the requirements of section 81 or 81a or a member whom the
retirement board finds to be totally and permanently disabled and
eligible to receive a retirement allowance under section 86 or 87
shall elect to receive his or her retirement allowance under 1 of
the payment options provided in this subsection. The election shall
be in writing and filed with the retirement board at least 15 days
before the effective date of the retirement allowance except as
provided for a disability retirant under section 86 or 87. The
amount of retirement allowance under subdivision (b), (c), or (d)
shall be the actuarial equivalent of the amount of retirement
allowance under subdivision (a). The options are as follows:
(a) A retirant shall be paid a straight retirement allowance
for life computed pursuant to section 84. An additional retirement
allowance payment shall not be made upon the retirant's death.
(b) A retirant shall be paid a reduced retirement allowance
for life with the provision that upon the retirant's death, payment
of the reduced retirement allowance is continued throughout the
lifetime of the retirement allowance beneficiary whom the member or
deferred member designates in a writing filed with the retirement
board at the time of election of this option. A member or deferred
member may elect this option and designate a retirement allowance
beneficiary under the conditions set forth in section 82(2) or
89(3).
(c) A retirant shall be paid a reduced retirement allowance
for life with the provision that upon the retirant's death, payment
of 1/2 of the reduced retirement allowance is continued throughout
the lifetime of the retirement allowance beneficiary whom the
member designated in a writing filed with the retirement board at
the time of election of the option.
(d) On and after January 1, 2000, a retirant shall be paid a
reduced retirement allowance for life with the provision that upon
the retirant's death, payment of 75% of the reduced retirement
allowance is continued throughout the lifetime of the retirement
allowance beneficiary whom the member designated in a writing filed
with the retirement board at the time of election of the option.
(2) In addition to the election under subsection (1), a
retirant, other than a disability retirant who is 60 years of age
or less, may elect to coordinate his or her retirement allowance
with an estimated primary social security benefit. The retirant
shall be paid an increased retirement allowance until 62 years of
age and a reduced retirement allowance after 62 years of age. The
increased retirement allowance paid until 62 years of age shall
approximate the sum of the reduced retirement allowance payable
after 62 years of age and the retirant's estimated social security
primary insurance amount. The estimated social security primary
insurance amount shall be determined by the retirement system. The
election under this subsection shall be made at the same time and
in the same manner as required under subsection (1).
(3) Except as otherwise provided in this section, the election
of a payment option in subsections (1) and (2) shall not be changed
on or after the effective date of the retirement allowance. Except
as
provided in subsection (5) this
section, the retirement
allowance beneficiary selected under subsection (1)(b), (c), or (d)
shall not be changed on or after the effective date of the
retirement allowance and shall be either a spouse, brother, sister,
parent, or child, including an adopted child, of the member,
deferred member, retiring member, or retiring deferred member
entitled to make the election under this act. Another retirement
allowance beneficiary shall not be selected. If a member, deferred
member, retiring member, or retiring deferred member is married at
the retirement allowance effective date, an election under
subsection (1), other than an election under subsection (1)(b),
(c), or (d) naming the spouse as retirement allowance beneficiary,
shall not be effective unless the election is signed by the spouse,
except that this requirement may be waived by the board if the
signature of a spouse cannot be obtained because of extenuating
circumstances. For purposes of this subsection, "spouse" means the
person to whom the member, deferred member, retiring member, or
retiring deferred member is married at the retirement allowance
effective date. Payment to a retirement allowance beneficiary shall
start the first day of the month following the retirant's death.
(4)
If Except as otherwise
provided in subsection (8), if
the retirement allowance beneficiary selected under subsection
(1)(b), (c), or (d) predeceases the retirant, the retirant's
benefit shall revert to a straight retirement allowance including
post-retirement adjustments, if any, shall be effective the first
of the month following the death, and shall be paid during the
remainder of the retirant's life. This subsection applies to a
retirant whose effective date of retirement is after June 28, 1976,
but the straight retirement allowance shall not be payable for any
month beginning before the later of the retirement allowance
beneficiary's death or October 31, 1980. This subsection also
applies to a retirant whose effective date of retirement was on or
before June 28, 1976, but the straight retirement allowance shall
not be payable for any month beginning before the later of the
retirement allowance beneficiary's death or January 1, 1986. A
retirant who on January 1, 1986 is receiving a reduced retirement
allowance because the retirant designated a retirement allowance
beneficiary and the retirement allowance beneficiary predeceased
the retirant is eligible to receive the straight retirement
allowance beginning January 1, 1986, but the straight retirement
allowance shall not be payable for any month beginning before
January 1, 1986.
(5) A retirant who returns to service pursuant to section 61
and whose retirement allowance beneficiary selected under
subsection (1)(b), (c), or (d) predeceases the member before he or
she again becomes a retirant may again choose a retirement
allowance beneficiary pursuant to subsection (1)(b), (c), or (d).
(6) If a retirant receiving a reduced retirement allowance
under subsection (1)(b), (c), or (d) is divorced from the spouse
who had been designated as the retirant's retirement allowance
beneficiary under subsection (1)(b), (c), or (d), the election of a
reduced retirement allowance payment option shall be considered
void by the retirement system if the judgment of divorce or award
or order of the court, or an amended judgment of divorce or award
or order of the court, described in the public employee retirement
benefit protection act, 2002 PA 100, MCL 38.1681 to 38.1689, and
dated after June 27, 1991 provides that the election of a reduced
retirement allowance payment option under subsection (1)(b), (c),
or (d) is to be considered void by the retirement system and the
retirant provides a certified copy of the judgment of divorce or
award or order of the court, or an amended judgment of divorce or
award or order of the court, to the retirement system. If the
election of a reduced retirement allowance payment option under
subsection (1)(b), (c), or (d) is considered void by the retirement
system under this subsection, the retirant's retirement allowance
shall revert to a straight retirement allowance, including
postretirement adjustments, if any, subject to an award or order of
the court as described in the public employee retirement benefit
protection act, 2002 PA 100, MCL 38.1681 to 38.1689. The retirement
allowance shall revert to a straight retirement allowance under
this subsection effective the first of the month after the date the
retirement system receives a certified copy of the judgment of
divorce or award or order of the court. This subsection does not
supersede a judgment of divorce or award or order of the court in
effect on June 27, 1991. This subsection does not require the
retirement system to distribute or pay retirement assets on behalf
of a retirant in an amount that exceeds the actuarially determined
amount that would otherwise become payable if a judgment of divorce
had not been rendered.
(7) If the retirement allowance payments terminate before an
aggregate amount equal to the retirant's accumulated contributions
has been paid, the difference between the retirant's accumulated
contributions and the aggregate amount of retirement allowance
payments made shall be paid to the person designated in a writing
filed with the retirement board on a form provided by the
retirement board. If the designated person does not survive the
retirant or retirement allowance beneficiary, the difference shall
be paid to the deceased recipient's estate or to the legal
representative of the deceased recipient.
(8) A retirant who selected a retirement allowance beneficiary
under subsection (1)(b), (c), or (d) may change his or her
retirement allowance beneficiary if all of the following apply:
(a) The first retirement allowance beneficiary is a spouse.
(b) The first retirement allowance beneficiary predeceases the
retirant after the retirement allowance effective date.
(c) The retirant marries another spouse after the retirement
allowance effective date.
(d) The retirant files a written request with the retirement
system to name his or her current spouse as a retirement allowance
beneficiary not earlier than 180 days and not later than 1 year
after the marriage of the retirant and the current spouse except
that a retirant whose first retirement allowance beneficiary
predeceases the retirant after the retirement allowance effective
date and before the effective date of the amendatory act that added
this subsection shall have 180 days from the effective date of the
amendatory act that added this subsection to file a written request
with the retirement system.
(9) A retirant who was not married on his or her retirement
allowance effective date and who did not select a payment option
provided in this section may select an optional form of benefit
payment under subsection (1)(b), (c), or (d) and designate a
retirement allowance beneficiary if all of the following apply:
(a) The retirant marries after his or her retirement allowance
effective date.
(b) The retirement allowance beneficiary is the retirant's
spouse.
(c) The retirement allowance beneficiary is only designated as
the retirement allowance beneficiary for that portion of the
retirant's retirement allowance that is not subject to an eligible
domestic relations order assigning a previous spouse a reduced
benefit under section 4(b) of the eligible domestic relations order
act, 1991 PA 46, MCL 38.1704.
(d) The retirant files a written request with the retirement
system to select the optional form of benefit payment under
subsection (1)(b), (c), or (d) and to designate his or her spouse
as the retirement allowance beneficiary, not earlier than 180 days
and not later than 1 year after the retirant's marriage except that
a retirant who marries after the retirement allowance effective
date and before the effective date of the amendatory act that added
this subsection shall have 180 days from the effective date of the
amendatory act that added this subsection to file a written request
with the retirement system.
(10) The retirement allowance of the retirant who makes an
election under subsection (8) or (9) shall not be greater than the
actuarial equivalent of the retirement allowance as determined by
the retirement board that the retirant would otherwise be entitled
to under subsection (1)(a) and shall become effective the first day
of the month following the filing of the written request with the
retirement system.
(11) If the retirant dies no later than 12 months after the
effective date of his or her election under subsection (8) or (9),
the retirement allowance for the surviving spouse established under
subsection (8) or (9) shall terminate 12 months after the death of
the retirant.
Sec.
91. (1) The Except
as otherwise provided in this
section, the retirement system shall pay the entire monthly premium
or membership or subscription fee for hospital, medical-surgical,
and sick care benefits for the benefit of a retirant or retirement
allowance beneficiary who elects coverage in the plan authorized by
the retirement board and the department. Upon the death of the
retirant, a retirement allowance beneficiary who became a
retirement allowance beneficiary under section 85(8) or (9) is not
a health insurance dependent and is not entitled to health benefits
under this section except as provided in subsection (10).
(2) The retirement system may pay up to the maximum of the
amount payable under subsection (1) toward the monthly premium for
hospital, medical-surgical, and sick care benefits for the benefit
of a retirant or retirement allowance beneficiary enrolled in a
group health insurance or prepaid service plan not authorized by
the retirement board and the department, if enrolled before June 1,
1975, for whom the retirement system on July 18, 1983 was making a
payment towards his or her monthly premium.
(3) A retirant or retirement allowance beneficiary receiving
hospital, medical-surgical, and sick care benefits coverage under
subsection (1) or (2), until eligible for medicare, shall have an
amount equal to the cost chargeable to a medicare recipient for
part B of medicare deducted from his or her retirement allowance.
(4) The retirement system shall pay 90% of the monthly premium
or membership or subscription fee for dental, vision, and hearing
benefits for the benefit of a retirant or retirement allowance
beneficiary who elects coverage in the plan authorized by the
retirement board and the department. Payments shall begin under
this subsection upon approval by the retirement board and the
department of plan coverage and a plan provider.
(5) The retirement system shall pay up to 90% of the maximum
of the amount payable under subsection (1) toward the monthly
premium or membership or subscription fee for hospital, medical-
surgical, and sick care benefits coverage described in subsections
(1) and (2) for each health insurance dependent of a retirant
receiving benefits under subsection (1) or (2). Payment shall not
exceed 90% of the actual monthly premium or membership or
subscription fee. The retirement system shall pay 90% of the
monthly premium or membership or subscription fee for dental,
vision, and hearing benefits described in subsection (4) for the
benefit of each health insurance dependent of a retirant receiving
benefits under subsection (4). Payment for health benefits coverage
for a health insurance dependent of a retirant shall not be made
after the retirant's death, unless the retirant designated a
retirement allowance beneficiary as provided in section 85 and the
dependent was covered or eligible for coverage as a health
insurance dependent of the retirant on the retirant's date of
death. Payment for health benefits coverage shall not be made for a
health insurance dependent after the later of the retirant's death
or the retirement allowance beneficiary's death. Payment under this
subsection and subsection (6) began October 1, 1985 for health
insurance dependents who on July 10, 1985 were covered by the
hospital, medical-surgical, and sick care benefits plan authorized
by the retirement board and the department. Payment under this
subsection and subsection (6) for other health insurance dependents
shall not begin before January 1, 1986.
(6) The payment described in subsection (5) shall also be made
for each health insurance dependent of a deceased member or
deceased duty disability retirant if a retirement allowance is
being paid to a retirement allowance beneficiary because of the
death of the member or duty disability retirant as provided in
section 43c(c), 89, or 90. Payment for health benefits coverage for
a health insurance dependent shall not be made after the retirement
allowance beneficiary's death.
(7) The payments provided by this section shall not be made on
behalf of a retiring section 82 deferred member or health insurance
dependent of a deferred member having less than 21 full years of
attained credited service or the retiring deferred member's
retirement allowance beneficiary, and shall not be made on behalf
of a retirement allowance beneficiary of a deferred member who dies
before retiring. The retirement system shall pay, on behalf of a
retiring section 82 deferred member or health insurance dependent
of a deferred member or a retirement allowance beneficiary of a
deceased deferred member, either of whose allowance is based upon
not less than 21 years of attained credited service, 10% of the
payments provided by this section, increased by 10% for each
attained full year of credited service beyond 21 years, not to
exceed 100%. This subsection applies to any member who attains
deferred status under section 82 after October 31, 1980.
(8) Any retirant or retirement allowance beneficiary excluded
from payments under this section may participate in the hospital,
medical-surgical, and sick care benefits plan, the dental plan,
vision plan, or hearing plan, or any combination of the plans
described in this section in the manner prescribed by the
retirement system at his or her own cost.
(9) The hospital, medical-surgical, and sick care benefits
plan, dental plan, vision plan, and hearing plan that covers
retirants, retirement allowance beneficiaries, and health insurance
dependents pursuant to this section shall contain a coordination of
benefits provision that provides all of the following:
(a) If the person covered under the hospital, medical-
surgical, and sick care benefits plan is also eligible for medicare
or medicaid, or both, then the benefits under medicare or medicaid,
or both, shall be determined before the benefits of the hospital,
medical-surgical, and sick care benefits plan provided pursuant to
this section.
(b) If the person covered under any of the plans provided by
this section is also covered under another plan that contains a
coordination of benefits provision, the benefits shall be
coordinated as provided by the coordination of benefits act, 1984
PA 64, MCL 550.251 to 550.255.
(c) If the person covered under any of the plans provided by
this section is also covered under another plan that does not
contain a coordination of benefits provision, the benefits under
the other plan shall be determined before the benefits of the plan
provided pursuant to this section.
(10) A surviving spouse selected as a retirement allowance
beneficiary under section 85(8) or (9) may elect the insurance
coverages provided in this section provided that payment for the
elected coverages is the responsibility of the surviving spouse and
is paid in a manner prescribed by the retirement system.
(11) (10)
For purposes of this section:
(a) "Health insurance dependent" means any of the following:
(i) The Except
as provided in subsection (1), the spouse
of
the retirant or the surviving spouse to whom the retirant or
deceased member was married at the time of the retirant's or
deceased member's death.
(ii) An unmarried child, by birth or adoption, of the retirant
or deceased member, until December 31 of the calendar year in which
the child becomes 19 years of age.
(iii) An unmarried child, by birth or adoption, of the retirant
or deceased member, until December 31 of the calendar year in which
the child becomes 25 years of age, who is enrolled as a full-time
student, and who is or was at the time of the retirant's or
deceased member's death a dependent of the retirant or deceased
member as defined in section 152 of the internal revenue code.
(iv) An unmarried child, by birth or adoption, of the retirant
or deceased member who is incapable of self-sustaining employment
because of mental or physical disability, and who is or was at the
time of the retirant's or deceased member's death a dependent of
the retirant or deceased member as defined in section 152 of the
internal revenue code.
(v) The parents of the retirant or deceased member, or the
parents of his or her spouse, who are residing in the household of
the retirant or retirement allowance beneficiary.
(vi) An unmarried child who is not the child by birth or
adoption of the retirant or deceased member but who otherwise
qualifies to be a health insurance dependent under subparagraph
(ii), (iii), or (iv), if the retirant or deceased member is the legal
guardian of the unmarried child.
(b) "Medicaid" means benefits under the federal medicaid
program established under title XIX of the social security act,
chapter
531, 49 Stat. 620, 42 U.S.C. USC
1396 to 1396f, 1396g-1
to 1396r-6, and 1396r-8 to 1396v.
(c) "Medicare" means benefits under the federal medicare
program established under title XVIII of the social security act,
chapter
531, 49 Stat. 620, 42 U.S.C. USC
1395 to 1395b, 1395b-2,
1395b-6 to 1395b-7, 1395c to 1395i, 1395i-2 to 1395i-5, 1395j to
1395t, 1395u to 1395w, 1395w-2 to 1395w-4, 1395w-21 to 1395w-28,
1395x to 1395yy, and 1395bbb to 1395ggg.
Enacting section 1. This amendatory act takes effect January
1, 2009.