SB-0547, As Passed House, October 1, 2007

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 547

      A bill to amend 1980 PA 300, entitled

"The public school employees retirement act of 1979,"

by amending section 43a (MCL 38.1343a), as amended by 2002 PA 94,

and by adding section 60.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1        Sec. 43a. (1) The contributions of a member who contributes

 2  to the member investment plan shall be deducted by the employer

 3  and remitted as employer contributions to the retirement system

 4  pursuant to section 42. A member who contributes to the member

 5  investment plan is entitled to the benefits provided in sections

 6  43b and 43c.

 7        (2) Until December 31, 1989, a member who first became a

 8  member on or before December 31, 1989, and who elected or elects

 9  on or before December 31, 1989 to contribute to the member

 1  investment plan shall contribute 4% of the member's compensation

 2  to the member investment plan and beginning January 1, 1990 shall

 3  contribute 3.9% of the member's compensation to the member

 4  investment plan.

 5        (3) On or before January 1, 1993, a member who first became

 6  a member on or before December 31, 1989, except as otherwise

 7  provided in subsection (4), and who did not elect to make

 8  contributions to the member investment plan, may irrevocably

 9  elect to make the contributions described in subsection (2). In

10  addition to making the contributions required under subsection

11  (2), a member who elects to make contributions to the member

12  investment plan under this subsection shall make a contribution

13  of 4% of the compensation received on or after January 1, 1987 to

14  December 31, 1989, and 3.9% of the compensation received on or

15  after January 1, 1990 to the date of the election, plus an amount

16  equal to the compound interest that would have accumulated on

17  those contributions as described in section 33, plus an amount

18  equal to the net actuarial cost of the additional benefits

19  attributable to service credited before January 1, 1987, as

20  determined by the retirement board. The method and timing of

21  payment by a member under this subsection shall be determined by

22  the retirement board. The contributions made under this

23  subsection shall be deposited into the reserve for employee

24  contributions.

25        (4) Except as otherwise provided in subsection (8), a A

26  member who first became a member on or before December 31, 1986

27  but did not perform membership service between December 31, 1986

 1  and January 1, 1990, and who returns to membership service on or

 2  after January 1, 1990 and before July 1, 2008 shall make the

 3  contributions described in subsection (7).

 4        (5) Except as otherwise provided in subsection (8), a A

 5  member who first became a member on or after January 1, 1990 and

 6  before July 1, 2008 shall make the contributions described in

 7  subsection (7).

 8        (6) A member who first became a member on or after January

 9  1, 1987 but before January 1, 1990 shall have 30 days from his or

10  her first date of employment to irrevocably elect to make the

11  contributions described in subsection (2).

12        (7) Except as otherwise provided in subsection (8), a A

13  member who first became a member on or after January 1, 1990 and

14  before July 1, 2008 shall contribute the following amounts to the

15  member investment plan:

16 Member's annual school fiscal        Amount payable to the member

17 year earned compensation             investment plan

18   Not over $5,000.00                   3% of member's compensation

19   Over $5,000.00 but not over          $150.00, plus 3.6% of the

20   $15,000.00                           excess over $5,000.00

21   Over $15,000.00                      $510.00, plus 4.3% of the

22                                        excess over $15,000.00

23        (8) This section and sections 43b and 43c shall not apply

24  until the department receives notification from the United States

25  internal revenue service that contributions under this section

26  picked up by the employer pursuant to section 42 shall not be

Senate Bill No. 547 (H-5) as amended October 1, 2007

 1  included as gross income of the member until they are distributed

 2  or made available to the member, retirant, retirement allowance

 3  beneficiary, or refund beneficiary.

 4        (8) A member who first became a member on or after July 1,

 5  2008 shall contribute the following amounts to the member

 6  investment plan:

7  Member's annual school                 Amount payable to the member

8  fiscal year earned compensation        investment plan

9  Not over $5,000.00                     3% of member's compensation

10 Over $5,000.00 but not over            $150.00, plus 3.6% of excess

11 $15,000.00                             over $5,000.00

12 Over $15,000.00                        $510.00, plus 6.4% of the

13                                        excess over $15,000.00

14        Sec. 60. Notwithstanding any provision of this act to the

15  contrary, on and after July 1, 2008, a member shall not purchase

16  service credit under this act unless the member has been granted

17  at least [2] years of service credit under section 68.

18        Enacting section 1. This amendatory act does not take effect

19  unless all of the following bills of the 94th Legislature are

20  enacted into law:

21        (a) House Bill No. 5194.

22        (b) House Bill No. 5198.