January 27, 2015, Introduced by Reps. Hughes, Somerville, Hooker, Heise, Outman, Bumstead, Maturen, Price, Crawford, McBroom, Tedder, Yonker, Graves, Kelly, Barrett, Chatfield, Victory, Callton, Muxlow, Bizon, Sheppard, Jenkins and Glenn 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 2012 PA 464.
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 shall 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 shall 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 shall 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) The state superintendent of public instruction shall
compile a listing of critical shortage disciplines. This listing
shall be updated annually.
(5)
Until July 1, 2014, subsection 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 a retirant in an area that has been
identified by the state superintendent of public instruction as a
critical
shortage discipline pursuant to 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 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 each retirant who becomes
employed by a reporting unit under this subsection.
(6)
Subsection (5) shall only apply 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 on or after July 1, 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 shall forfeit forfeits
his or her
retirement allowance and the retirement system subsidy for health
care
benefits from the retirement system for as long as while the
retirant is employed at the reporting unit unless the retirant is
employed
under as described in subsection (5), (9), or (10). 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. Upon termination of employment
at the reporting unit, the retirement allowance and health care
benefits shall resume without recalculation.
(8) Notwithstanding any other provision of this act to the
contrary, for a retirant who retires on or after July 1, 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 shall
forfeit
forfeits his or her retirement allowance and the retirement
system subsidy for health care benefits from the retirement system
for
as long as while the retirant is performing core services at
the
reporting unit, unless the retirant is employed under as
described in subsection (9) or (10). 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. Upon termination of services at the reporting unit, the
retirement allowance and health care benefits shall resume without
recalculation.
(9)
Until July 1, 2014, subsection Subsection
(1) does not
apply to a retirant who retires on or after July 1, 2010; 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, 2014, subsection Subsection
(1) does not
apply to a retirant who retires on or after July 1, 2010; 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 state superintendent
of public instruction under subsection (4).