HB-5944, As Passed House, June 27, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 5944

A bill to amend 1943 PA 240, entitled

"State employees' retirement act,"

by amending section 19 (MCL 38.19), as amended by 2002 PA 93.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 19. (1) A member who is 60 years of age or older and has

10 or more years of credited service or a member who is 60 years of

age or older and has 5 or more years of credited service as

provided in section 20(4) or (5) may retire upon written

application to the retirement board, stating a date on which he or

she desires to retire. Beginning on the retirement allowance

effective date, he or she shall receive a retirement allowance

computed according to section 20(1).

(2) A member who is 55 years of age or older, but less than 60

years of age, and has 15 or more years of credited service, may

retire upon written application to the retirement board stating a

date on which he or she desires to retire. Upon retirement he or

she shall receive a retirement allowance computed according to

section 20(1). Except as otherwise provided in this act, the

retirement allowance of a member who has less than 30 years of

credited service shall be reduced by an amount that is 0.5% of the

retirement allowance multiplied by the number of months the

person's age at retirement is under 60 years. The reduction of 1/2

of 1% for each month and fraction of a month from the member's

retirement allowance effective date to the date of the member's

sixtieth birthday provided for in this subsection does not apply to

a member who retired before July 1, 1974 and before attainment of

age 60, with 30 or more years of credited service. The retirement

allowance of a retirant or beneficiary of a retirant who retired

before that date shall be recalculated disregarding the reduction,

and the person receiving the retirement allowance is eligible to

receive an adjusted retirement allowance based on the recalculation

beginning October 1, 1987, but is not eligible to receive the

adjusted amount attributable to any month beginning before October

1, 1987. The recalculated retirement allowance provided by this

subsection shall be paid by January 1, 1988. The retirement

allowance of a retirant who dies before January 1, 1988, and who

has not nominated a retirement allowance beneficiary pursuant to

section 31, shall not be recalculated pursuant to this subsection.

(3) Notwithstanding any other provision of this section,

effective April 1, 1988, a member may retire with a retirement

allowance computed according to section 20(1), without regard to

the reduction in subsection (2), if all of the following apply:

(a) The member files a written application with the retirement

board stating a date, not less than 30 or more than 90 days after

the execution and filing of the application, on which the member

desires to retire, and which is within the early retirement

effective period.

(b) The member was employed by the state for the 6-month

period immediately preceding the member's retirement allowance

effective date. This subdivision does not apply to a member who had

been restored to active service during that 6-month period pursuant

to section 33.

retirement allowance effective date stated in the application, the

member's combined age and length of credited service is equal to or

greater than 80 years and the member is 50 years of age or older.

(d) For purposes of this subsection, "early retirement

effective period" means 1 of the following:

(i) Except as provided in subparagraph (ii), the period

beginning on April 1, 1988 and ending on April 1, 1989.

(ii) For a member employed by a hospital or facility owned or

operated by the department formerly known as the department of

mental health that is in the process of being closed by the

department formerly known as the department of mental health, the

period beginning on April 1, 1988 and ending on October 1, 1989.

(4) As used in subsections (5) to (9):

(a) "Agency of the department" means 1 of the following:

(i) Southwest Michigan community living services.

(ii) Wayne community living services.

(b) "Department inpatient facility" means 1 of the following:

(i) A developmental disability center that is directly operated

by the department formerly known as the department of mental health

for purposes of providing inpatient care and treatment services to

persons with developmental disabilities.

(ii) A psychiatric hospital that is directly operated by the

department formerly known as the department of mental health for

purposes of providing inpatient diagnostic and therapeutic services

to persons who are mentally ill.

(5) Notwithstanding any other provision of this section, a

member who is an employee of an agency of the department or a

department inpatient facility and is on layoff status because the

agency or inpatient facility has been designated by the state

officer formerly known as the director of mental health for closure

on or after October 1, 1989, may retire as provided in subsection

(7) or (8), as applicable, with a retirement allowance computed

according to section 20(1), without regard to the reduction in

subsection (2), upon satisfaction of any 1 of the following

conditions:

(a) The member is 51 years of age or older and has 25 or more

years of credited service, the last 5 of which are as an employee

of an agency of the department designated for closure or a

department inpatient facility designated for closure.

(b) The member is at least 56 years of age and has 10 or more

years of credited service, the last 5 of which are as an employee

of an agency of the department designated for closure or a

department inpatient facility designated for closure.

regardless of age, as an employee of an agency of the department

designated for closure or a department inpatient facility

designated for closure.

(6) When a department inpatient facility or agency is

designated for closure on or after October 1, 1989, the state

officer formerly known as the director of mental health shall

certify in writing to the state legislature and the retirement

board, not less than 240 days before the designated official date

of closure, which facility or agency is to be closed and the

designated official date of closure.

(7) Except as provided in subsection (8), a member who is

eligible to receive a retirement allowance under subsection (5) may

retire effective on the date that an agency of the department or a

department inpatient facility designated for closure as provided in

subsection (5) actually closes, upon written application to the

retirement board not less than 30 or more than 180 days before the

designated official date of closure. Beginning on the retirement

allowance effective date, he or she shall receive a retirement

allowance computed according to section 20(1).

(8) A member who is on layoff status, is not working for the

state, and becomes eligible to receive a retirement allowance under

subsection (5) and who was an employee of an agency of the

department or a department inpatient facility that has been

designated for closure as provided in subsection (5) and that

actually closes on or after October 1, 1989, may retire upon

written application to the retirement board, stating a date upon

which he or she wishes to retire. Beginning on the retirement

allowance effective date, he or she shall receive a retirement

allowance computed according to section 20(1).

(9) Any additional accrued actuarial cost and costs for health

insurance resulting from the implementation of subsection (5) shall

be funded from appropriations to the department formerly known as

the department of mental health for this purpose.

(10) A member who is an employee of the state accident fund on

the date of transfer to a permitted transferee as that term is

defined by section 701a of the worker's disability compensation act

of 1969, 1969 PA 317, MCL 418.701a, may retire if the member's age

and his or her length of service is equal to or greater than 70

years on the date of transfer. The member may retire upon written

application to the retirement board, stating a date, not less than

30 or more than 90 days after the execution and filing of the

application, on which he or she desires to retire. Beginning on the

retirement allowance effective date, he or she shall receive a

retirement allowance computed according to section 20(1) without

regard to the reduction required by subsection (2).

(11) A member who is an employee of the Michigan biologic

products institute on the date the institute is conveyed pursuant

to the Michigan biologic products institute transfer act, 1996 PA

522, MCL 333.26331 to 333.26340, may retire if the member's age and

his or her length of service is equal to or greater than 70 years

on the date of the conveyance. The member may retire upon written

application to the retirement board, stating a date, not less than

30 or more than 90 days after the execution and filing of the

application, on which he or she desires to retire. Beginning on the

retirement allowance effective date, he or she shall receive a

retirement allowance computed according to section 20(1) without

regard to the reduction required by subsection (2).

(12) A member who is an employee of the liquor control

commission created by section 209 of the Michigan liquor control

code of 1998, 1998 PA 5, MCL 436.1209, whose employment is

terminated due to the privatization of the distribution of spirits

within this state is effectuated pursuant to the resolution and

order adopted by the liquor control commission on February 7, 1996,

a plan adopted pursuant to statute or court order, or a plan

adopted pursuant to both statute and order of the liquor control

commission may retire if the member's age and his or her length of

service is equal to or greater than 70 years on the date the

privatization is effectuated. The member may retire under this

subsection upon written application to the retirement board,

stating a date, not less than 30 or more than 90 days after the

execution and filing of the application, on which he or she desires

to retire. Beginning on the retirement allowance effective date, he

or she shall receive a retirement allowance computed according to

section 20(1), without regard to the reduction required by

subsection (2). The cost of benefits paid under this section shall

be paid out of the revolving fund created under section 221 of the

Michigan liquor control code of 1998, 1998 PA 58, MCL 436.1221.

(13) A member who is an employee of the bureau of juvenile

justice in the department of human services on October 1, 2007 and

who is laid off or displaced on or after October 1, 2007 and on or

before September 30, 2009 may retire if the member's age and his or

her length of service is equal to or greater than 70 years on the

date the member is laid off or displaced. The member may retire

under this subsection upon written application to the retirement

board, stating a date, not less than 30 or more than 90 days after

the execution and filing of the application, on which he or she

desires to retire. Beginning on the retirement allowance effective

date, he or she shall receive a retirement allowance computed

according to section 20(1) without regard to the reduction required

by subsection (2).

(14) A member who is an employee of the bureau of juvenile

justice in the department of human services on October 1, 2007 and

who is laid off or displaced on or after October 1, 2007 and on or

before September 30, 2009 may retire if the member's age and his or

her length of service is equal to or greater than 75 years on the

date the member is laid off or displaced. The member may retire

under this subsection upon written application to the retirement

board, stating a date, not less than 30 or more than 90 days after

the execution and filing of the application, on which he or she

desires to retire. Upon his or her retirement as provided in this

subsection, a member who did not make an election to terminate

membership in Tier 1 and became a qualified participant in Tier 2

shall receive a retirement allowance equal to the member's number

of years and fraction of a year of credited service multiplied by

1-3/4% of his or her final average compensation. Except for the

calculation provided in this subsection, the member's retirement

allowance is subject to section 20. The member's retirement

allowance is not subject to reduction pursuant to subsection (2).

(15) A member who is employed by the department of corrections

as a storekeeper or in a facility business office in an accounting

or procurement position on October 1, 2007 and who is laid off or

displaced on or after October 1, 2007 and on or before September

30, 2009 may retire if the member's age and his or her length of

service is equal to or greater than 70 years on the date the member

is laid off or displaced. The member may retire under this

subsection upon written application to the retirement board,

stating a date, not less than October 1, 2007 and before September

30, 2009 after the execution and filing of the application, on

which he or she desires to retire. Beginning on the retirement

allowance effective date, he or she shall receive a retirement

allowance computed according to section 20(1) without regard to the

reduction required by subsection (2).

(16) A member who is employed by the department of corrections

as a storekeeper or in a facility business office in an accounting

or procurement position on October 1, 2007 and who is laid off or

displaced on or after October 1, 2007 and on or before September

30, 2009 may retire if the member's age and his or her length of

service is equal to or greater than 75 years on the date the member

is laid off or displaced. The member may retire under this

subsection upon written application to the retirement board,

stating a date, not less than October 1, 2007 and before September

30, 2009 after the execution and filing of the application, on

which he or she desires to retire. Upon his or her retirement as

provided in this subsection, a member who did not make an election

to terminate membership in Tier 1 and became a qualified

participant in Tier 2 shall receive a retirement allowance equal to

the member's number of years and fraction of a year of credited

service multiplied by 1-3/4% of his or her final average

compensation. Except for the calculation provided in this

subsection, the member's retirement allowance is subject to section

20. The member's retirement allowance is not subject to reduction

pursuant to subsection (2).

(17) For purposes of this section, an employee who is

displaced is an active employee who must move from his or her

assignment location because of a staffing imbalance resulting from

layoffs, a reduction in force, a closure, or any combination

thereof.