November 30, 2017, Introduced by Reps. Leutheuser, Lower, Albert and Crawford and referred to the Committee on Michigan Competitiveness.
A bill to amend 1937 PA 345, entitled
"Fire fighters and police officers retirement act,"
by amending section 9 (MCL 38.559), as amended by 2002 PA 98, and
by adding section 2a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2a. A retirement board under this act, a retirement
system under this act, and a city, village, or municipality that is
the custodian of funds of a retirement system under this act shall
comply with any applicable requirements under the protecting local
government retirement and benefits act.
Sec. 9. (1) The contributions of a member to the retirement
system
shall must be 5% of the salary paid to the member by the
municipality. The officer responsible for making up the payroll
shall cause the contributions provided for in this subsection to be
deducted from the salary of each member on each payroll for each
payroll
period so long as while he or she remains an active member
in
the employ of employed by the municipality. The amounts deducted
shall
must be paid into the funds of the retirement system. The
members'
contributions provided for in this act shall must be
made
notwithstanding that the minimum salary provided for by law is
changed
by the members' contributions. Every A member shall be is
considered to consent and to agree to the deductions made and
provided for in this act and shall receipt for his or her full
salary and payment of his or her salary less the deduction, which
is a full and complete discharge and acquittance of all claims and
demands for the services rendered by the member during the period
covered by the payment, except as to benefits provided by this
retirement system.
(2) For the purpose of creating and maintaining a fund for the
payment of the pensions and other benefits payable as provided in
this
act, the municipality, subject to the provisions of this act,
shall appropriate, at the end of such regular intervals as may be
adopted, quarterly, semiannually, or annually, an amount sufficient
to maintain actuarially determined reserves covering pensions
payable
or that might be payable on account because of service
performed and to be performed by active members, and pensions being
paid to retired members and beneficiaries. The appropriations to be
made
by the municipality in any fiscal year shall must be
sufficient to pay all pensions due and payable in that fiscal year
to all retired members and beneficiaries and sufficient to pay the
normal costs of any retirement health benefits provided by the
retirement system to its members, retired members, and
beneficiaries in the amount required under section 4(1)(e) of the
protecting local government retirement and benefits act or to make
other payments required for the retirement system in a corrective
action plan under the protecting local government and retirement
benefits act. The amount of the appropriation in a fiscal year
shall
must not be less than 10% of the aggregate pay received
during that fiscal year by members of the retirement system unless,
by actuarial determination, it is satisfactorily established that a
lesser percentage is needed. All deductions and appropriations
shall
must be payable to the treasurer of the municipality and
he
or she shall pay the deductions and appropriations into the
retirement system. Except in municipalities that are subject to the
15 mill tax limitation as provided by section 6 of article IX of
the state constitution of 1963, the amount required by taxation to
meet the appropriations to be made by municipalities under this act
shall
must be in addition to any tax limitation imposed upon
on tax
rates in those municipalities by charter provisions or by state law
subject to section 25 of article IX of the state constitution of
1963. A tax levied under this subsection must be used only by the
municipality levying the tax for purposes authorized under this
subsection and must not be attributed or transmitted to or retained
or captured by any other governmental entity for any other purpose.
(3)
If, at the beginning or during any fiscal year, it has
been
satisfactorily determined by the
retirement board determines
that the accumulated funds of the retirement system plus the
municipality's contribution of 10% of the aggregate pay received
during that fiscal year by members of the retirement system plus
members' contributions of 5% of payroll, are insufficient to pay
all pensions and other benefits due and payable in that year out of
funds
of the retirement system, then all pensions and other
benefits
payable shall must be prorated for the remainder of the
fiscal year by the retirement board.
(4) Any clerical, legal, actuarial, or medical expenses
required by the retirement board, or any other necessary expense
for the operation of the retirement system, shall be provided for
by the municipality or shall be paid from the investment income of
the retirement system, as determined by the governing body of the
municipality. The retirement board shall submit expenses
periodically to the governing body of the municipality. If use of
investment income to pay these expenses causes an actuarial
insufficiency in the assets of the retirement system used to pay
pensions,
the municipality shall make up the insufficiency. shall
be
made up by the municipality.
(5) All pensions allowed and payable to retired members and
beneficiaries
under this act shall become are
obligations of and
must be payable from the funds of the retirement system.
(6)
The right of a person an
individual to a pension, to the
return of member contributions, to retirement health benefits, to
any other optional benefits, or any other right accrued or accruing
to a member or beneficiary under this act, and the money belonging
to the retirement system is subject to the public employee
retirement benefit protection act, 2002 PA 100, MCL 38.1681 to
38.1689.
(7) As used in this section:
(a) "Normal cost" means that term as defined in section 3 of
the protecting local government retirement and benefits act.
(b) "Retirement health benefit" means that term as defined in
section 3 of the protecting local government retirement and
benefits act.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. ____ or House Bill No. 5298 (request no.
00251'17 *) of the 99th Legislature is enacted into law.