SENATE BILL No. 953

 

 

January 11, 2006, Introduced by Senators BERNERO, CLARK-COLEMAN, PRUSI and BRATER and referred to the Committee on Appropriations.

 

 

 

     A bill to amend 1943 PA 240, entitled

 

"State employees' retirement act,"

 

by amending section 19 (MCL 38.19), as amended by 2002 PA 93.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 19. (1) A member who is 60 years of age or older and has

 

10 or more years of credited service,  or  a member who is 60 years

 

of age or older and has 5 or more years of credited service as

 

provided in section 20(4) or (5), or beginning December 31, 2005, a

 

member who is 50 years of age or older and whose combined age and

 

amount of credited service is equal to or greater than 80 years may

 

retire upon written application to the retirement board, stating a

 

date on which he or she desires to retire. Beginning on the

 

retirement allowance effective date, he or she shall receive a


 

retirement allowance computed according to section 20(1) without

 

regard to the reduction in subsection (2).

 

     (2) A member who is 55 years of age or older, but less than 60

 

years of age, and has 15 or more years of credited service, may

 

retire upon written application to the retirement board stating a

 

date on which he or she desires to retire. Upon retirement he or

 

she shall receive a retirement allowance computed according to

 

section 20(1). Except as otherwise provided in this act, the

 

retirement allowance of a member who has less than 30 years of

 

credited service shall be reduced by an amount that is 0.5% of the

 

retirement allowance multiplied by the number of months the

 

person's age at retirement is under 60 years. The reduction of 1/2

 

of 1% for each month and fraction of a month from the member's

 

retirement allowance effective date to the date of the member's

 

sixtieth birthday provided for in this subsection does not apply to

 

a member who retired before July 1, 1974 and before attainment of

 

age 60, with 30 or more years of credited service. The retirement

 

allowance of a retirant or beneficiary of a retirant who retired

 

before that date shall be recalculated disregarding the reduction,

 

and the person receiving the retirement allowance is eligible to

 

receive an adjusted retirement allowance based on the recalculation

 

beginning October 1, 1987, but is not eligible to receive the

 

adjusted amount attributable to any month beginning before October

 

1, 1987. The recalculated retirement allowance provided by this

 

subsection shall be paid by January 1, 1988. The retirement

 

allowance of a retirant who dies before January 1, 1988, and who

 

has not nominated a retirement allowance beneficiary pursuant to


 

section 31, shall not be recalculated pursuant to this subsection.

 

     (3) Notwithstanding any other provision of this section,

 

effective April 1, 1988, a member may retire with a retirement

 

allowance computed according to section 20(1), without regard to

 

the reduction in subsection (2), if all of the following apply:

 

     (a) The member files a written application with the retirement

 

board stating a date, not less than 30 or more than 90 days after

 

the execution and filing of the application, on which the member

 

desires to retire, and which is within the early retirement

 

effective period.

 

     (b) The member was employed by the state for the 6-month

 

period immediately preceding the member's retirement allowance

 

effective date. This subdivision does not apply to a member who had

 

been restored to active service during that 6-month period pursuant

 

to section 33.

 

     (c) On the last day of the month immediately preceding the

 

retirement allowance effective date stated in the application, the

 

member's combined age and length of credited service is equal to or

 

greater than 80 years and the member is 50 years of age or older.

 

     (d) For purposes of this subsection, "early retirement

 

effective period" means 1 of the following:

 

     (i) Except as provided in subparagraph (ii), the period

 

beginning on April 1, 1988 and ending on April 1, 1989.

 

     (ii) For a member employed by a hospital or facility owned or

 

operated by the department formerly known as the department of

 

mental health that is in the process of being closed by the

 

department formerly known as the department of mental health, the


 

period beginning on April 1, 1988 and ending on October 1, 1989.

 

     (4) As used in subsections (5) to (9):

 

     (a) "Agency of the department" means 1 of the following:

 

     (i) Southwest Michigan community living services.

 

     (ii) Wayne community living services.

 

     (b) "Department inpatient facility" means 1 of the following:

 

     (i) A developmental disability center that is directly operated

 

by the department formerly known as the department of mental health

 

for purposes of providing inpatient care and treatment services to

 

persons with developmental disabilities.

 

     (ii) A psychiatric hospital that is directly operated by the

 

department formerly known as the department of mental health for

 

purposes of providing inpatient diagnostic and therapeutic services

 

to persons who are mentally ill.

 

     (5) Notwithstanding any other provision of this section, a

 

member who is an employee of an agency of the department or a

 

department inpatient facility and is on layoff status because the

 

agency or inpatient facility has been designated by the state

 

officer formerly known as the director of mental health for closure

 

on or after October 1, 1989, may retire as provided in subsection

 

(7) or (8), as applicable, with a retirement allowance computed

 

according to section 20(1), without regard to the reduction in

 

subsection (2), upon satisfaction of any 1 of the following

 

conditions:

 

     (a) The member is 51 years of age or older and has 25 or more

 

years of credited service, the last 5 of which are as an employee

 

of an agency of the department designated for closure or a


 

department inpatient facility designated for closure.

 

     (b) The member is at least 56 years of age and has 10 or more

 

years of credited service, the last 5 of which are as an employee

 

of an agency of the department designated for closure or a

 

department inpatient facility designated for closure.

 

     (c) The member has 25 or more years of credited service,

 

regardless of age, as an employee of an agency of the department

 

designated for closure or a department inpatient facility

 

designated for closure.

 

     (6) When a department inpatient facility or agency is

 

designated for closure on or after October 1, 1989, the state

 

officer formerly known as the director of mental health shall

 

certify in writing to the state legislature and the retirement

 

board, not less than 240 days before the designated official date

 

of closure, which facility or agency is to be closed and the

 

designated official date of closure.

 

     (7) Except as provided in subsection (8), a member who is

 

eligible to receive a retirement allowance under subsection (5) may

 

retire effective on the date that an agency of the department or a

 

department inpatient facility designated for closure as provided in

 

subsection (5) actually closes, upon written application to the

 

retirement board not less than 30 or more than 180 days before the

 

designated official date of closure. Beginning on the retirement

 

allowance effective date, he or she shall receive a retirement

 

allowance computed according to section 20(1).

 

     (8) A member who is on layoff status, is not working for the

 

state, and becomes eligible to receive a retirement allowance under


 

subsection (5) and who was an employee of an agency of the

 

department or a department inpatient facility that has been

 

designated for closure as provided in subsection (5) and that

 

actually closes on or after October 1, 1989, may retire upon

 

written application to the retirement board, stating a date upon

 

which he or she wishes to retire. Beginning on the retirement

 

allowance effective date, he or she shall receive a retirement

 

allowance computed according to section 20(1).

 

     (9) Any additional accrued actuarial cost and costs for health

 

insurance resulting from the implementation of subsection (5) shall

 

be funded from appropriations to the department formerly known as

 

the department of mental health for this purpose.

 

     (10) A member who is an employee of the state accident fund on

 

the date of transfer to a permitted transferee as that term is

 

defined by section 701a of the worker's disability compensation act

 

of 1969, 1969 PA 317, MCL 418.701a, may retire if the member's age

 

and his or her length of service is equal to or greater than 70

 

years on the date of transfer. The member may retire upon written

 

application to the retirement board, stating a date, not less than

 

30 or more than 90 days after the execution and filing of the

 

application, on which he or she desires to retire. Beginning on the

 

retirement allowance effective date, he or she shall receive a

 

retirement allowance computed according to section 20(1) without

 

regard to the reduction required by subsection (2).

 

     (11) A member who is an employee of the Michigan biologic

 

products institute on the date the institute is conveyed pursuant

 

to the Michigan biologic products institute transfer act, 1996 PA


 

522, MCL 333.26331 to 333.26340, may retire if the member's age and

 

his or her length of service is equal to or greater than 70 years

 

on the date of the conveyance. The member may retire upon written

 

application to the retirement board, stating a date, not less than

 

30 or more than 90 days after the execution and filing of the

 

application, on which he or she desires to retire. Beginning on the

 

retirement allowance effective date, he or she shall receive a

 

retirement allowance computed according to section 20(1) without

 

regard to the reduction required by subsection (2).

 

     (12) A member who is an employee of the liquor control

 

commission created by section 209 of the Michigan liquor control

 

code of 1998, 1998 PA 5, MCL 436.1209, whose employment is

 

terminated due to the privatization of the distribution of spirits

 

within this state is effectuated pursuant to the resolution and

 

order adopted by the liquor control commission on February 7, 1996,

 

a plan adopted pursuant to statute or court order, or a plan

 

adopted pursuant to both statute and order of the liquor control

 

commission may retire if the member's age and his or her length of

 

service is equal to or greater than 70 years on the date the

 

privatization is effectuated. The member may retire under this

 

subsection upon written application to the retirement board,

 

stating a date, not less than 30 or more than 90 days after the

 

execution and filing of the application, on which he or she desires

 

to retire. Beginning on the retirement allowance effective date, he

 

or she shall receive a retirement allowance computed according to

 

section 20(1), without regard to the reduction required by

 

subsection (2). The cost of benefits paid under this section shall


 

be paid out of the revolving fund created under section 221 of the

 

Michigan liquor control code of 1998, 1998 PA 58, MCL 436.1221.