Bill Text: MI HB4577 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Retirement; public school employees; postretirement adjustments; provide for. Amends sec. 104a of 1980 PA 300 (MCL 38.1404a).
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced - Dead) 2009-03-17 - Printed Bill Filed 03/13/2009 [HB4577 Detail]
Download: Michigan-2009-HB4577-Introduced.html
HOUSE BILL No. 4577
March 12, 2009, Introduced by Reps. Warren, Gregory, Smith, Bauer and Polidori and referred to the Committee on Labor.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending section 104a (MCL 38.1404a), as amended by 1998 PA
213.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 104a. (1) After the end of each state fiscal year, the
2 department shall determine the rate of investment return earned
3 on retirement system assets during the fiscal year, based upon
4 methods established by the retirement board.
5 (2) At the end of each state fiscal year, the retirement
6 system's actuary shall determine the present value of retirement
7 allowances to be paid after the end of the fiscal year to
8 retirants and retirement allowance beneficiaries in receipt of
9 retirement allowances at the end of the fiscal period. The
1 assumed interest rate used in the determination shall be 8% per
2 year, compounded annually.
3 (3) The distribution income at the end of each state fiscal
4 year shall be equal to the product of the present value of
5 retirement allowances determined in subsection (2) at the end of
6 the previous fiscal year times the positive excess, if any, of
7 the rate of investment return determined in subsection (1)
8 exceeding 8%. The distribution income calculated pursuant to this
9 subsection at the end of the fiscal years 1984-85 and 1985-86
10 shall be reduced by the cost of prior postretirement adjustments
11 paid from the appropriated credit for excess interest earnings on
12 retired life assets during the fiscal year pursuant to sections
13 101, 102, 103, and 104.
14 (4) After the end of each state fiscal year, each retirant
15 and retirement allowance beneficiary in receipt of a retirement
16 allowance at the end of the fiscal year, and whose effective date
17 of retirement allowance preceded the beginning of that fiscal
18 year, shall be credited with 1 distribution unit for each full
19 year between the effective date of retirement and the end of the
20 fiscal year and 1 distribution unit for each full year of service
21 credit in force on the effective date of retirement. Distribution
22 units shall not accumulate from 1 year to the next year.
23 (5) The distribution amount for an individual retirant or
24 retirement allowance beneficiary shall be equal to the product of
25 the distribution income determined in subsection (3) times the
26 individual's number of distribution units determined in
27 subsection (4) divided by the total number of distribution units
1 for all eligible retirants and retirement allowance beneficiaries
2 in receipt of retirement allowances at the end of the fiscal
3 year. The distribution amount for an individual retirant or
4 retirement allowance beneficiary of a retirant or member who
5 contributed to the member investment plan is zero.
6 (6) Each retirement allowance that was effective on or
7 before January 1, 1987 shall be increased effective on the later
8 of January 1, 1986 or the retirement allowance effective date.
9 The amount of the increase shall be 8% of the retirement
10 allowance that would be payable as of the date of the increase
11 without application of this subsection, except that if the
12 retirement allowance is being paid under section 85(2), the
13 increase shall be based on the retirement allowance that would
14 have been paid under the payment option selected by the member
15 under section 85(1).
16 (7) Until and including October 1, 1989, each retirement
17 allowance that was effective on or before January 1, 1987 shall
18 be increased each October 1 beginning with the later of October
19 1, 1986 or the first October 1 following the retirement allowance
20 effective date. The amount of the annual increase shall be equal
21 to 40.5% of the increase computed in subsection (6).
22 (8) After the end of each state fiscal year, the cumulative
23 increase amount shall be computed for each retirant or retirement
24 allowance beneficiary affected by subsections (6), (7), and (11).
25 The cumulative increase amount shall be equal to the difference
26 between the total retirement allowance paid during the state
27 fiscal year and the retirement allowance that would have been
1 payable without application of subsections (6), (7), and (11).
2 The cumulative increase amount for any retirant or retirement
3 allowance beneficiary whose effective date of retirement is after
4 January 1, 1987 is zero.
5 (9) In March of each year, beginning in March, 1986, each
6 retirant or retirement allowance beneficiary shall be paid, in a
7 single supplemental payment, the excess, if any, of the
8 distribution amount over the cumulative increase amount for the
9 previous state fiscal year. If a retirant dies before receipt of
10 a supplemental payment, the supplemental payment shall be made to
11 the retirant's retirement allowance beneficiary, if any. If both
12 the retirant and the retirement allowance beneficiary die before
13 receipt of a supplemental payment, no payment shall be made.
14 (10) Each retirement allowance that was effective before
15 October 1, 1981 shall be increased effective January 1, 1990. The
16 amount of the increase shall be a percentage of the retirement
17 allowance that is payable as of January 1, 1990 without
18 application of this subsection, except that if the retirement
19 allowance is being paid under section 85(2), the increase shall
20 be based on the retirement allowance that would have been paid
21 under the payment option selected under section 85(1). The
22 percentage is as follows:
23 Effective date of retirement Percentage
24 October 1, 1980 to September 30, 1981 1%
25 October 1, 1979 to September 30, 1980 2%
26 October 1, 1978 to September 30, 1979 3%
27 October 1, 1977 to September 30, 1978 4%
1 October 1, 1976 to September 30, 1977 5%
2 October 1, 1975 to September 30, 1976 6%
3 October 1, 1974 to September 30, 1975 7%
4 October 1, 1973 to September 30, 1974 8%
5 October 1, 1972 to September 30, 1973 9%
6 October 1, 1971 to September 30, 1972 10%
7 October 1, 1970 to September 30, 1971 11%
8 October 1, 1969 to September 30, 1970 12%
9 October 1, 1968 to September 30, 1969 13%
10 October 1, 1967 to September 30, 1968 14%
11 October 1, 1966 to September 30, 1967 15%
12 October 1, 1965 to September 30, 1966 16%
13 October 1, 1964 to September 30, 1965 17%
14 October 1, 1963 to September 30, 1964 18%
15 October 1, 1962 to September 30, 1963 19%
16 October 1, 1961 to September 30, 1962 20%
17 October 1, 1960 to September 30, 1961 21%
18 Before October 1, 1960 22%
19 (11) Each retirement allowance that was effective on or
20 before January 1, 1987 shall be increased each October 1
21 beginning October 1, 1990. The amount of the annual increase
22 shall be equal to 3% of the retirement allowance that would be
23 payable without application of this subsection, except that if
24 the retirement allowance is being paid under section 85(2), the
25 increase shall be based on the retirement allowance that would
26 have been paid under the payment option selected under section
27 85(1).
28 (12) Beginning January 1, 2010, the monthly retirement
29 allowance payable to a retirant or retirement allowance
1 beneficiary whose retirement allowance effective date was before
2 October 1, 1990 is supplemented as follows:
3 Effective date of retirement Percent of
4 increase
5 October 1, 1989 to September 30, 1990 4
6 October 1, 1988 to September 30, 1989 6
7 October 1, 1987 to September 30, 1988 8
8 October 1, 1986 to September 30, 1987 10
9 October 1, 1985 to September 30, 1986 12
10 October 1, 1984 to September 30, 1985 14
11 October 1, 1983 to September 30, 1984 16
12 October 1, 1982 to September 30, 1983 18
13 October 1, 1981 to September 30, 1982 20
14 October 1, 1980 to September 30, 1981 22
15 October 1, 1979 to September 30, 1980 24
16 October 1, 1978 to September 30, 1979 26
17 October 1, 1977 to September 30, 1978 28
18 Before October 1, 1977 30
19 (13) The recalculated retirement allowance in subsection
20 (12) shall be based upon the retirement allowance the retirant or
21 the retirement allowance beneficiary is entitled to receive as of
22 September 30, 2009 and shall be the basis on which future
23 adjustments to the allowance are calculated.
