February 18, 2016, Introduced by Reps. Jacobsen, Garcia, Poleski, Price and Pscholka and referred to the Committee on Appropriations.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending sections 5, 81d, and 131 (MCL 38.1305, 38.1381d, and
38.1431), sections 5 and 131 as amended and section 81d as added by
2012 PA 300.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 5. (1) "Member" means a public school employee, except
that member does not include any of the following:
(a) A person enrolled in a neighborhood youth corps program
operated
with funds from the federal office of economic opportunity
Office of Economic Opportunity or a person enrolled in a comparable
youth training program designed to prevent high school dropouts and
rehabilitate high school dropouts operated by an intermediate
school district.
(b) A person enrolled in a transitional public employment
program and employed by a reporting unit.
(c) A person employed by a reporting unit while enrolled as a
full-time student in that same reporting unit.
(d) A person who elects to participate in the optional
retirement program under the optional retirement act of 1967, 1967
PA 156, MCL 38.381 to 38.388.
(e) A retirant of this retirement system.
(f) A person, not regularly employed by a reporting unit, who
is employed by a reporting unit through a summer youth employment
program
established pursuant to under
the Michigan youth corps act,
1983 PA 69, MCL 409.221 to 409.229.
(g) A person, not regularly employed by a reporting unit, who
is employed by a reporting unit to administer a program described
in subdivision (f), (h), (i), (j), or (k).
(h) After September 30, 1983, a person, not regularly employed
by a reporting unit, who is employed by a reporting unit through
participation
in a program established pursuant to under the former
job training partnership act, Public Law 97-300, 96 Stat. 1322 or
beginning July 1, 2000, the workforce investment act of 1998,
Public Law 105-220, 112 Stat. 936.
(i) A person, not regularly employed by a reporting unit, who
is employed by a reporting unit through participation in a program
established
pursuant to under the work first program under section
57f of the social welfare act, 1939 PA 280, MCL 400.57f.
(j) A person, not regularly employed by a reporting unit, who
is employed by a reporting unit through participation in a program
established
pursuant to under the Michigan community service corps
program, first established under sections 25 to 35 of 1983 PA 259.
(k) A person, not regularly employed by a reporting unit, who
is employed by a reporting unit through participation in a program
established
pursuant to under the older American community service
employment
program under the older American community service
employment
act, title V of the older Americans act of 1965, Public
Law
89-73, 42 USC 3056 to 3056i.3056p.
(l) A person, not regularly employed by a reporting unit, who
is employed by a reporting unit in a temporary, intermittent, or
irregular seasonal or athletic position and who is under the age of
19 years.
(m) A person, not regularly employed by a reporting unit, who
is employed by a reporting unit only in a temporary position to
assist in the conduct of a school election.
(n) A qualified participant who makes a valid election under
section
81d 81d(1) to not become a member of Tier 1.
(o) A qualified participant who is not a member of Tier 1
under section 81d(4).
(2) "Membership service" means service performed after June
30, 1945.
(3)
"Noncontributory plan" means the plan which that began
between July 1, 1974 and July 1, 1977, in which the reporting unit
elected to discontinue withholding contributions from employees'
compensation.
(4) "Noncontributory service" means credited service rendered
under the noncontributory plan.
(5) "Nonteacher" means a person employed by a reporting unit
who
is not a teacher as defined in section 8(4).8.
Sec.
81d. (1) The Except as
otherwise provided in subsection
(4), the retirement system shall permit each qualified participant
who first becomes a qualified participant and first works for a
reporting unit on or after September 4, 2012 to make an election to
not become a member of Tier 1 and become only a qualified
participant in Tier 2.
(2)
The retirement system shall
determine a method of
accepting
elections under this subsection (1) and reporting units
shall secure those elections during the period beginning on the
date
of the individual's employment and ending upon on the
expiration of 75 days from the individual's first payroll date. An
election
under this subsection (1) is irrevocable.
(3)
An individual who does not make an
election under this
subsection for any reason on or before the close of the election
period is considered to have made an election to become a member of
Tier 1 and is subject to all of the following as of the date of his
or her employment:
(a) He or she is eligible to accrue any service credit or
qualify for any retirement allowance under Tier 1 under the terms
as provided in section 81c.
(b) He or she is also a qualified participant under Tier 2.
(2) (4)
An individual who makes the
election under subsection
(1) on or before the close of the election period is considered to
have made an election to not become a member of Tier 1 and is
subject to all of the following as of the date of his or her
employment:
(a) He or she is not eligible to accrue any service credit or
qualify for any retirement allowance under Tier 1 under the terms
as provided in section 81c.
(b) He or she is only a qualified participant under Tier 2.
(3) (5)
The retirement system shall collect
from the an
individual described in subsection (1) all amounts required under
sections 43a and 131(2) and shall collect all required employer
contributions required under Tier 1 from his or her date of
employment. If an individual makes a valid election under
subsection (1) to not become a member of Tier 1, the retirement
system shall determine and implement a method to reconcile employer
and
employee contributions to be deposited to Tier 2, and any such
the employee contributions will be considered to be elective
contributions under section 131.
(4) An individual who first becomes a qualified participant
and first works for a reporting unit after June 30, 2016, if the
reporting unit is a qualified reporting unit, is not a member of
Tier 1, and is only a qualified participant in Tier 2. An
individual described in this subsection is subject to all of the
following as of the date of his or her employment:
(a) He or she is not eligible to accrue any service credit or
qualify for a retirement allowance under Tier 1 under the terms as
provided in section 81c.
(b) He or she is only a qualified participant under Tier 2.
(5) As used in this section, a "qualified reporting unit"
means a reporting unit that is a community district organized under
part 5b of the revised school code, 1976 PA 451, MCL 380.381 to
380.395.
Sec. 131. (1) This section is subject to the vesting
requirements of section 132.
(2) Unless a qualified participant who is also a member of
Tier 1 affirmatively elects not to contribute or elects to
contribute a lesser amount, the qualified participant who is also a
member of Tier 1 shall contribute 2% of his or her compensation to
his or her Tier 2 account. The qualified participant's employer
shall make a contribution to the qualified participant's Tier 2
account in an amount equal to 50% of the first 2% of compensation
contributed by the qualified participant under this subsection.
(3) A qualified participant who is also a member of Tier 1 may
make contributions in addition to contributions made under
subsection (2) to his or her Tier 2 account as permitted by the
department and the internal revenue code.
(4)
Upon On the written determination of the director of the
office of retirement services, an employee of an employer that is
not a qualified participant may elect to make contributions to a
Tier 2 account as permitted by the department and the internal
revenue
code. An employee as described in this subsection shall be
is treated as a qualified participant under this article for the
limited purposes of his or her Tier 2 account.
(5)
Upon On the written determination of the director of the
office of retirement services, an employer may annually elect to
make additional matching contributions, including those in addition
to matching contributions made under subsections (2) and (6), to an
employee's Tier 2 account as permitted by the plan document and the
internal revenue code. Matching contributions under this subsection
shall
must be made in amounts equal to 50% of the contributions
made by the employee not to exceed the first 4% of contributions
made in whole percentages only, for any employee in addition to
amounts that are already matched under this section, if any.
(6) Except as otherwise provided in section 81d, unless a
qualified participant who is only a Tier 2 qualified participant
due
to because of an election made under section 81d(1) or who is
only a Tier 2 qualified participant under section 81(d)(4)
affirmatively elects not to contribute or elects to contribute a
lesser amount, the qualified participant shall contribute 6% of his
or her compensation to his or her Tier 2 account. The qualified
participant's employer shall make a contribution to the qualified
participant's Tier 2 account in an amount equal to 50% of the first
6% of compensation contributed by the qualified participant under
this subsection.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. ____ or House Bill No. 5384 (request no.
03997'15) of the 98th Legislature is enacted into law.