August 3, 2016, Introduced by Rep. Hughes and referred to the Committee on Financial Liability Reform.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending section 61 (MCL 38.1361), as amended by 2015 PA 219.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 61. (1) Except as otherwise provided in this section, if
a retirant is receiving a retirement allowance other than a
disability allowance payable under this act or under former 1945 PA
136, on account of either age or years of personal service
performed, or both, and becomes employed by a reporting unit, the
following must occur:
(a) The retirant is not entitled to a new final average
compensation or additional service credit under this retirement
system unless additional service is performed equivalent to 5 or
more years of service credit or, if the retirant has contributed to
the member investment plan, the equivalent of 3 or more years of
service credit. The retirant may elect to have the retirement
allowance recomputed based on the added credit or the final average
compensation resulting from the added service, or both. A
retirement allowance shall not be recomputed until the retirant
pays into the retirement system an amount equal to the retirant's
new final average compensation multiplied by the percentage
determined under section 41(2) for normal cost and unfunded
actuarial accrued liabilities, not including the percentage
required for the funding of health benefits, multiplied by the
total service credit in the period in which the retirant's
additional service was performed.
(b) The retirant's retirement allowance must be reduced by the
lesser of the amount that the earnings in a calendar year exceed
the amount permitted without a reduction of benefits under the
social security act, chapter 531, 49 Stat 620, or 1/3 of the
retirant's final average compensation. For purposes of computing
allowable earnings under this subdivision, the final average
compensation must be increased by 5% for each full year of
retirement.
(2) The retirement system may offset retirement benefits
payable under this act against amounts owed to the retirement
system by a retirant or retirement allowance beneficiary.
(3) Subsection (1) does not apply to a retirant if all of the
following circumstances exist:
(a) The retirant is a former teacher or administrator employed
in a teaching or research capacity by a university that is
considered a reporting unit for the limited purpose described in
section 7(3). A university that employs a retirant under this
subsection shall report that employment to the retirement system by
July 1 of each year. The university shall include in the report the
name of the retirant, the capacity in which the retirant is
employed, and the total annual compensation paid to the retirant.
(b) The retirant is not eligible to use any service or
compensation attributable to the employment described in
subdivision (a) for a recomputation of his or her retirement
allowance.
(4) Not later than April 1 of each year, the superintendent of
public instruction shall compile a listing of critical shortage
disciplines based on evidence of a shortage for each discipline.
The department of education shall post the listing and the
accompanying evidence on its website. If a discipline is not
included in the listing of critical shortage disciplines, 2 or more
contiguous reporting units may submit a written request to the
superintendent of public instruction to add a discipline to the
listing. The request must include evidence of a shortage of the
discipline in those contiguous reporting units. If the
superintendent of public instruction determines that there is a
shortage of the discipline in those contiguous reporting units, the
superintendent of public instruction shall add the discipline to
the listing. A discipline added under a request under this
subsection is applicable only to those contiguous reporting units.
For purposes of this subsection, a reporting unit that is a public
school academy is considered contiguous to any other reporting unit
in which the public school academy is located.
(5) Until July 1, 2018, subsection (1) does not apply to a
retirant if all of the following circumstances exist:
(a) The retirant is employed by a reporting unit that has a
situation, not including a situation caused by a labor dispute,
that necessitates the hiring of the retirant in an area that has
been identified by the superintendent of public instruction as a
critical shortage discipline under subsection (4).
(b) The retirant is employed under any situation described in
subdivision (a) for a period not to exceed 3 years for that
retirant.
(c) The retirant is not eligible to use any service or
compensation attributable to the employment described in
subdivision (a) for a recomputation of his or her retirement
allowance.
(d) The reporting unit pays 100% of the contribution rates for
the unfunded actuarial accrued liability for retiree health care
and the unfunded actuarial accrued liability for pension to the
retirement system for each retirant who becomes employed by a
reporting unit under this subsection.
(6) Subsection (5) only applies for retirants who have been
retired for at least 12 months before becoming employed under this
section.
(7) Notwithstanding any other provision of this act to the
contrary, for a retirant who retires after June 30, 2010, and
following a bona fide termination, including not working in the
month of the retirant's retirement effective date, and who becomes
employed by a reporting unit and the retirant's amount of earnings
in a calendar year exceeds 1/3 of the retirant's final average
compensation, the retirant forfeits his or her retirement allowance
and the retirement system subsidy for health care benefits from the
retirement system for the entire month of each month in which the
retirant is employed at the reporting unit unless the retirant is
employed as described in subsection (5), (9), (10), or (11). A
retirant who has forfeited the retirement system subsidy for health
care benefits under this subsection and who wants to retain health
care benefits shall pay the retirant's and retirement system's
costs for the health care benefits. The retirement allowance and
retirement system subsidy for health care benefits shall resume
without recalculation on the first of the month following the month
in which the retirant has terminated reporting unit employment.
(8) Notwithstanding any other provision of this act to the
contrary, for a retirant who retires after June 30, 2010, who
performs core services at a reporting unit as determined by the
retirement system, but who is employed by an entity other than the
reporting unit or is an independent contractor, the retirant
forfeits his or her retirement allowance and the retirement system
subsidy for health care benefits from the retirement system for the
entire month of each month in which the retirant is performing core
services at the reporting unit, unless the retirant is employed as
described in subsection (9), (10), or (12). A retirant who has
forfeited the retirement system subsidy for health care benefits
under this subsection and who wants to retain health care benefits
shall pay the retirant's and retirement system's costs for the
health care benefits. The retirement allowance and retirement
system subsidy for health care benefits shall resume without
recalculation on the first of the month following the month in
which the retirant has terminated performing core services, as
described in this subsection.
(9) Until July 1, 2018, subsection (1) does not apply to a
retirant
who retires after June 30, 2010 and on or before September
1,
2015; 2, 2016; who following a bona fide termination, including
not working in the month of his or her retirement effective date,
becomes employed as a substitute teacher by a reporting unit, by an
entity other than the reporting unit, or as an independent
contractor; and whose amount of earnings attributable to employment
by or at a reporting unit in a calendar year does not exceed 1/3 of
his or her final average compensation. A retirant described in this
subsection is not eligible to use any service or compensation
attributable to the employment described in this subsection for a
recomputation of his or her retirement allowance. The reporting
unit at which the retirant provides substitute teacher services
described in this subsection shall pay 100% of the contribution
rates for the unfunded actuarial accrued liability for retiree
health care and the unfunded actuarial accrued liability for
pension to the retirement system for the employment described in
this subsection. The reporting unit shall report the engagement of
substitute teachers to the retirement system at the same interval
the reporting unit reports information to the retirement system
with regard to its other employees. The reporting unit shall
include in the report the name of the substitute teacher and the
total earnings paid to the substitute teacher for that reporting
period. In order to comply with the reporting requirements of this
subsection, a reporting unit that engages substitute teachers
through an entity other than a reporting unit or as independent
contractors shall obtain from the substitute teacher's employer a
list of all substitute teachers the employer supplies to that
reporting unit and the total earnings paid to each substitute
teacher for the reporting period. An employer other than a
reporting unit that employs substitute teachers as described in
this subsection shall provide to the reporting unit all information
that the reporting unit is required to report to the retirement
system under this subsection. For the purposes of this subsection,
an employer includes an independent contractor.
(10) Until July 1, 2018, subsection (1) does not apply to a
retirant
who retires after June 30, 2010 and on or before September
1,
2, 2015; who following a bona fide termination,
including not
working in the month of his or her retirement effective date,
becomes employed as an instructional coach or a school improvement
facilitator by an entity other than the reporting unit or as an
independent contractor; and whose amount of earnings attributable
to employment at a reporting unit in a calendar year does not
exceed 1/3 of his or her final average compensation. A retirant
described in this subsection is not eligible to use any service or
compensation attributable to the employment described in this
subsection for a recomputation of his or her retirement allowance.
The reporting unit at which the retirant provides the services
described in this subsection shall pay 100% of the contribution
rates for the unfunded actuarial accrued liability for retiree
health care and the unfunded actuarial accrued liability for
pension to the retirement system for the employment described in
this subsection. The reporting unit shall report the engagement of
instructional coaches or school improvement facilitators to the
retirement system at the same interval the reporting unit reports
information to the retirement system with regard to its other
employees. The reporting unit shall include in the report the name
of the instructional coach or school improvement facilitator and
the total earnings paid to the coach or facilitator for that
reporting period. In order to comply with the reporting
requirements of this subsection, a reporting unit shall obtain from
the coach's or facilitator's employer a list of all instructional
coaches and school improvement facilitators the employer supplies
to that reporting unit and the total earnings paid to each coach or
facilitator for the reporting period. An employer other than a
reporting unit that employs instructional coaches or school
improvement facilitators as described in this subsection shall
provide to the reporting unit all information that the reporting
unit is required to report to the retirement system under this
subsection. For the purposes of this subsection, an employer
includes an independent contractor. As used in this subsection,
"instructional coach" and "school improvement facilitator" mean
those terms as used in the listing of critical shortage disciplines
developed by the superintendent of public instruction under
subsection (4).
(11) Subsection (1) does not apply to a retirant who is a
former teacher or administrator who retires after June 30, 2010 and
on
or before October 1, 2, 2014,
who following a bona fide
termination, including not working in the month of his or her
retirement effective date, becomes employed in a teaching or
research capacity or in a program-department direction capacity by
a university that is considered a reporting unit for the limited
purpose described in section 7(3). A retirant described in this
subsection is not eligible to use any service or compensation
attributable to the employment described in this subsection for
recomputation of his or her retirement allowance. The reporting
unit at which the retirant provides the services described in this
subsection shall pay 100% of the contribution rates for the
unfunded actuarial accrued liability for retiree health care and
the unfunded actuarial accrued liability for pension to the
retirement system for the employment described in this subsection.
The reporting unit shall report the employment of a retirant as
described in this subsection to the retirement system by July 1 of
each year. The reporting unit shall include in the report the name
of the retirant, the capacity in which the retirant is employed,
and the total annual compensation paid to the retirant.
(12) Until July 1, 2018, notwithstanding any provision of this
act to the contrary, for a retirant who retires after June 30,
2010, who is employed as an independent contractor at a reporting
unit for a situation described in subsection (5)(a) or is employed
at a reporting unit for a situation described in subsection (5)(a)
by an entity other than the reporting unit, who has been retired
for at least 12 months before becoming employed under this
subsection, and whose employment under this subsection does not
exceed 3 years, the reporting unit at which the retirant provides
services under this subsection shall pay 100% of the contribution
rates for the unfunded actuarial accrued liability for retiree
health care and the unfunded actuarial accrued liability for
pension to the retirement system for the employment described in
this subsection.