HB-4059, As Passed House, March 5, 2015

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4059

 

 

 

 

 

 

 

 

 

 

 

     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. 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 the entire

 

month in which 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 The retirement

 

allowance and 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 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 the entire month in which the retirant is performing

 

core services at the reporting unit, unless the retirant is

 

employed under as described in subsection (9), or (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. Upon termination of services at

 

the reporting unit, the The retirement allowance and 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, 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).

 

     (11) Notwithstanding any provision of this act to the

 

contrary, for a retirant who retires on or after July 1, 2010, who

 

is employed as an independent contractor at a reporting unit that

 

has a situation described in subsection (5)(a) or is employed at a

 

reporting unit that has 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.