HOUSE BILL No. 5092

 

 

October 12, 2017, Introduced by Rep. Lilly 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 131 (MCL 38.1431), as amended by 2017 PA 92.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     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 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) 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 is treated as a

 

qualified participant under this article for the limited purposes

 

of his or her Tier 2 account.

 

     (5) 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

 

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 an election made under section 81d(1) 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. Until January 31, 2018,

 

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. Beginning February 1, 2018, the

 

qualified participant's employer shall make a contribution to the

 

qualified participant's Tier 2 account in an amount equal to 100%

 

of the first 3% of compensation contributed by the qualified

 

participant under this subsection. Beginning February 1, 2018, all

 

contributions made by an employer under this subsection must be

 

paid by appropriation from the state school aid fund established by

 

section 11 of article IX of the state constitution of 1963,

 

assuming 100% participation by all qualified participants.Any

 

contributions required to be made by an employer under this

 

subsection must be funded from money appropriated and allocated by

 

the legislature specifically for the purpose of making required

 

contributions under this subsection, and an employer is not

 

required to use general operating funds to make these

 

contributions.

 

     (7) For a qualified participant who is only a Tier 2 qualified

 

participant under section 81d, beginning with the first available

 

pay period after October 1, 2017, the qualified participant's

 

employer shall make a contribution to the qualified participant's

 

Tier 2 account in an amount equal to 4% of the qualified

 

participant's compensation.