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HB-4087, As Passed Senate, October 5, 2011

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4087

A bill to amend 1957 PA 261, entitled

"Michigan legislative retirement system act,"

by amending sections 75 and 79 (MCL 38.1075 and 38.1079), section

75 as amended by 1998 PA 501 and section 79 as amended by 2006 PA

614.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 75. (1) A qualified participant is immediately 100%

vested in his or her contributions made to Tier 2. A qualified

participant shall vest in the employer contributions made on his or

her behalf to Tier 2 according to the following schedule:

(a) Upon completion of 2 years of service, 50%.

(b) Upon completion of 3 years of service, 75%.

(2) A qualified participant is vested in the health insurance

coverage provided in section 79 if the qualified participant meets

1 of the following requirements:

(a) The qualified participant has completed 6 years of service

as a qualified participant before January 1, 2013 and was not a

member, deferred vested member, or former nonvested member of Tier

(b) The qualified participant was a member, deferred vested

member, or former nonvested member of Tier 1 who made an election

to participate in Tier 2 pursuant to section 61, and who has met

the service requirements he or she would have been required to meet

in order to vest in health benefits under section 50b.

requirements:

(i) Was not a member, deferred vested member, or former

nonvested member of Tier 1.

(ii) Was first elected to fill a vacancy in the house of

representatives for a period less than the full term but more than

1/2 of the term of office.

(iii) Has completed 5 years of service as a qualified

participant before January 1, 2013.

Sec. 79. (1) A former qualified participant may elect health

insurance benefits in the manner prescribed in this section if he

or she meets both of the following requirements:

(a) The former qualified participant is vested in health

benefits under section 75(2).

(b) The former qualified participant meets 1 of the following

requirements:

(i) He or she meets or exceeds the benefit commencement age

employed in the actuarial present value calculation under section

62 and the service requirements that would have applied to that

former participant under Tier 1 for receiving health insurance

coverage under section 50b, if that former participant was a member

of Tier 1.

(ii) He or she is 55 years of age or older.

(2) A former qualified participant who is eligible to elect

health insurance coverage under subsection (1) may elect health

insurance coverage in a health benefit plan or plans as authorized

by section 50b. A former qualified participant who is eligible to

elect health insurance coverage under subsection (1) may also elect

health insurance coverage for his or her health benefit dependents,

if any. A surviving health benefit dependent of a deceased former

qualified participant who is eligible to elect health insurance

coverage under subsection (1) may elect health insurance coverage

to begin at the death of the deceased former qualified participant

in the manner prescribed in this section.

(3) An individual who elects health insurance coverage under

this section shall become a member of a health insurance coverage

group authorized pursuant to section 50b.

(4) For a former qualified participant who is eligible to

elect health insurance coverage under subsection (1) and who is

vested in those benefits under section 75(2)(a) or (c), and for his

or her health benefit dependents, this state shall pay a portion of

the health insurance premium as calculated under this subsection on

a cash disbursement method. An individual described in this

subsection who elects health insurance coverage under this section

shall pay to the retirement system the remaining portion of the

health insurance coverage premium not paid by this state under this

subsection. The portion of the health insurance coverage premium

paid by this state under this subsection shall be 90% of the

payments for health insurance coverage under section 50b. If the

individual elects the health insurance coverage provided under

section 50b, this state shall transfer its portion of the amount

calculated under this subsection to the health insurance fund

created by section 22c.

(5) For a former qualified participant who is eligible to

elect health insurance coverage under subsection (1) and who is

vested in those benefits under section 75(2)(b), and for his or her

health benefit dependents, this state shall pay a portion of the

health insurance premium as calculated under this subsection on a

cash disbursement method. An individual described in this

subsection who elects health insurance coverage under this section

shall pay to the retirement system the remaining portion of the

health insurance coverage premium not paid by this state under this

subsection. The portion of the health insurance coverage premium

paid by this state under this subsection shall be equal to the

premium amounts paid on behalf of retirants of Tier 1 for health

insurance coverage under section 50b. If the individual elects the

health insurance coverage provided under section 50b, the state

shall transfer its portion of the amount calculated under this

subsection to the health insurance fund created by section 22c.

(6) If the department of technology, management, and budget

receives notification from the United States internal revenue

service that this section or any portion of this section will cause

the retirement system to be disqualified for tax purposes under the

internal revenue code, then the portion that will cause the

disqualification does not apply.

(7) A former qualified participant who does not meet the

vesting requirements of section 75(2) is not eligible for health

insurance benefits under this act.