March 3, 2005, Introduced by Senators GARCIA, GILBERT, KUIPERS and CROPSEY and referred to the Committee on Education.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending sections 69, 69c, 69f, and 75 (MCL 38.1369, 38.1369c,
38.1369f, and 38.1375), sections 69, 69c, and 75 as amended by 1989
PA 194, and section 69f as added by 1989 PA 194.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 69. (1) As a condition for granting membership or prior
service credit under this act for out of system public education
service, a member shall pay to the retirement system an amount
equal to the amount the member would have contributed pursuant to
the schedule governing member contributions in effect at the time
of that service had the service been performed under this act or
former Act
No. 136 of the Public Acts of 1945 1945
PA 136,
together with regular interest from the end of the school fiscal
year in which service was performed to the semiannual anniversary
of the date following the payment, and shall have 5 years of
reporting
unit service credit under this act or former Act No. 136
of
the Public Acts of 1945 1945
PA 136, following the out of
system public education service.
(2) A member shall not be entitled to a retirement allowance
based on out of system public education service that was performed
after July 1, 1974, until the member pays into the retirement
system for that service an amount equal to 5% of the member's full-
time or equated full-time compensation earned in the school fiscal
year before the school fiscal year in which the application to
purchase and payment for the service credit is made, multiplied by
the years of that service the member elects to purchase and unless,
for a member who becomes a member before December 31, 2005, that
service is followed by 5 years of reporting unit service credit
under this act. A member who becomes a member on or after December
31, 2005 and who purchases service credit under this section shall
follow the purchase of service credit by 10 years of reporting unit
service credit under this act.
(3) For the purposes of computing payment under this section,
the compensation amount used shall not be less than the highest
school fiscal year compensation previously earned by the member. If
the compensation amount used for computing payment under this
section exceeds the member's final average compensation determined
at the time of retirement, the payment required under this section
shall be recomputed using the member's final average compensation
and a refund shall be made based upon the recomputation. Credit
provided by this section shall not be used in satisfying the
minimum of 10 years of service credit required under this act for a
retirement allowance. A person who had employment with a community
mental health service program as described in section 6(2) shall
not be subject to the minimum of 10 years of service credit, if the
other requirements of this section are met.
(4) A member shall not receive more than 15 years of out of
system public education service. A member shall not receive more
out of system public education service than service performed under
this
act or former Act No. 136 of the Public Acts of 1945 1945 PA
136, unless, before July 1, 1974, the member applied for out of
system public education service credit based upon payment of
contributions
for that service credit as required under former Act
No.
136 of the Public Acts of 1945 1945
PA 136. The total out of
system public education service credited shall be used to compute
the member's retirement allowance if the minimum service
requirements
performed under this act or former
Act No. 136 of the
Public
Acts of 1945 1945 PA 136 are met.
(5) If a member who made payment for out of system public
education service dies and a retirement allowance beneficiary has
not been designated, or if the member withdraws from service before
his or her retirement becomes effective, the payment made by the
member shall be refunded to the member or to the member's refund
beneficiary upon request.
(6) Out of system public education service shall not be
creditable toward retirement under this act if the member is or
will be receiving a retirement allowance for the same service from
another retirement system.
(7) Out of system public education service shall not be
creditable under this act unless similar service performed in a
reporting unit would be creditable.
(8) Before January 31, 1991, a member may elect to purchase
service credit as an elementary or secondary teacher at a United
States armed forces military base in the United States or a foreign
country upon payment to the retirement board of the actuarial cost.
Sec. 69c. (1) A member may elect to purchase service credit
for service performed as an employee in a nonpublic elementary or
secondary educational institution or a nonpublic 2- or 4-year
institution of higher education in this state, in other states of
the United States, or in the territorial possessions of the United
States upon request and presentation of documentation of the
employment rendered that is verifiable from official employment or
payroll records or other acceptable documentation as determined by
the retirement board, and upon payment to the retirement system of
the actuarial cost.
(2) Before January 31, 1991, a member may elect to purchase
service credit for service performed as an employee in a foreign
country at a school for United States personnel or dependents of
the United States military or United States department of state
personnel; service performed as a full-time teacher with the job
corps created pursuant to section 422 of part B of title IV of the
job
training partnership act, Public Law 97-300, 29 U.S.C. USC
1692; service performed as a teacher in a trust territory or former
trust territory of the United States; or service performed as a
teacher on an Indian reservation in this country; upon request and
presentation of documentation of the employment rendered that is
verifiable from official employment or payroll records or other
acceptable documentation as determined by the retirement board, and
upon payment to the retirement system of the actuarial cost.
(3) Service
For a member who becomes a
member before
December 31, 2005, service shall not be credited under this section
unless the service being purchased is followed by at least 5 years
of
reporting unit service credit under this act or former Act
No.
136
of the Public Acts of 1945 1945
PA 136. For a member who
becomes a member on or after December 31, 2005, service shall not
be credited under this section unless the service being purchased
is followed by at least 10 years of reporting unit service credit
under this act. Service purchased under this section shall not be
used to satisfy the minimum of 10 years of service credit required
to receive a retirement allowance under this act. The total service
credited under subsections (1) and (2) shall not exceed 5 years.
(4) If a member who made payment for service under this
section dies and a retirement allowance beneficiary has not been
designated, or if the member withdraws from service before his or
her retirement becomes effective, the payment made by the member
shall be refunded to the member or to the member's refund
beneficiary upon request.
(5) Service shall not be credited under this section if the
member is or will be receiving a pension or annuity for the same
service from another retirement system.
(6) A person who became a retirant with a retirement allowance
effective date on or after January 1, 1988 and on or before
December 21, 1988 shall be entitled to purchase service credit for
service performed as an employee in a nonpublic elementary or
secondary educational institution or a nonpublic 2- or 4-year
institution of higher education as provided by this section.
Service credit purchased pursuant to this subsection shall be
purchased before July 1, 1989, or the expiration of 6 months after
December 21, 1988, whichever is later. The monthly retirement
allowance of a retirant entitled to purchase service credit under
this subsection shall be recomputed based upon the additional
service credit. The recomputed monthly amount shall be payable
beginning on the first day of the month following the month in
which payment is received by the retirement system.
(7) As used in this section:
(a) "Nonpublic elementary or secondary educational
institution" means an institution that offers or provides an
organized course of academic study primarily oriented toward the
awarding of high school diplomas. Nonpublic elementary or secondary
educational institution does not include a proprietary school.
(b) "Nonpublic 2- or 4-year institution of higher education"
means an institution that offers an organized course of academic
study primarily oriented toward the awarding of associate,
baccalaureate, master's, doctoral, or other academic degrees.
Nonpublic 2- or 4-year institution of higher education does not
include a proprietary school.
(c) "Proprietary school" means a school that uses a certain
plan or method to teach a trade, occupation, or vocation for a
consideration, reward, or promise. Proprietary school includes, but
is not limited to, a private business, trade, or home study school.
Sec. 69f. (1) A member may elect to purchase not more than 5
years of service credit less the number of years of service credit
purchased under sections 6(2)(c), (d), (e), and (f), 64(3), (4),
and (5), 69a, 69b, 69c(2), 69d, 69e, 74a, 74b, 77, and 78, upon
request and payment to the retirement system of the actuarial cost.
(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) Service credit purchased under this section shall not be
used to satisfy the service credit requirement set forth in section
81(1)(a) for a retirement allowance paid prior to age 46 as
provided by section 43b(a).
(4) If a member who made payment for service under this
section dies and a retirement allowance is not payable, or if the
member withdraws from service and a retirement allowance is not
payable, the payment made by the member shall be refunded to the
member or to the member's refund beneficiary upon request.
(5) Service purchased under this section shall not be credited
to a member who becomes a member on or after December 31, 2005
unless the member follows the purchase of service credit under this
section with 10 years of reporting unit service credit under this
act.
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.
(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 or a
person who reduces hours of out of system public education service
for purposes of maternity, paternity, or child rearing 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) Service purchased under this section shall not be credited
to a member who becomes a member on or after December 31, 2005
unless the member has at least 10 years of reporting unit service
credit under this act.