Bill Text: MI HB5697 | 2009-2010 | 95th Legislature | Introduced

Michigan House Bill 5697 (Prior Session Legislation)

Introduced

Bill Title: Retirement; county employees; public employee health benefit system; require to harmonize with county retirees. Amends sec. 12a of 1851 PA 156 (MCL 46.12a).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-12-15 - Printed Bill Filed 12/11/2009 [HB5697 Detail]

Download: Michigan-2009-HB5697-Introduced.html

HOUSE BILL No. 5697

December 10, 2009, Introduced by Rep. Dillon and referred to the Committee on Public Employee Health Care Reform.

A bill to amend 1851 PA 156, entitled

"An act to define the powers and duties of the county boards of

commissioners of the several counties, and to confer upon them

certain local, administrative and legislative powers; and to

prescribe penalties for the violation of the provisions of this

act,"

by amending section 12a (MCL 46.12a), as amended by 2003 PA 219.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 12a. (1) A county board of commissioners at a lawfully

held meeting may do 1 or more of the following:

(a) Provide group life, health, accident and hospitalization,

and disability coverage for a county employee, retired employee, or

an employee of an office, board, or department of the county,

including the board of county road commissioners, and a dependent

of an employee, either with or without cost participation by the

employee, and appropriate the necessary funds for the insurance.

For a county with 100 employees or more, self-insure for health,

accident and hospitalization, and group disability coverage for a

county employee, retired employee, or an employee of an office,

board, or department of the county, including the board of county

road commissioners, and a dependent of an employee, either with or

without cost participation by the employee, and appropriate the

necessary funds. All retirement health benefits coverage under this

act shall be provided and authorized in accordance with the

Michigan health benefits program act. Coverage provided and plans

authorized in accordance with the Michigan health benefits program

act shall be provided and authorized subject to section 21 of the

Michigan health benefits program act.

(b) Adopt and establish a plan by which the county purchases

or participates in the cost of an endowment policy or retirement

annuity for a county employee or an employee of an office, board,

or department of the county, including the board of county road

commissioners, to provide monthly pension or retirement benefits

for each employee 60 years of age or older in an amount not to

exceed $150.00 per month or 2% of the average monthly earnings of

the employee for 5 years immediately before retirement times the

years of service of the employee, whichever is the lesser sum. As

an option, a county board of commissioners may adopt and establish

a plan by which the county pays pension or retirement benefits to a

county employee or an employee of an office, board, or department

of the county, including the board of county road commissioners,

who has been employed for not less than 25 years, or who is 60

years of age or older and has been employed for not less than 5

years, in monthly payments not to exceed 2.5% of the employee's

highest average monthly compensation or earnings received from the

county or county road fund for 5 years of service times the total

number of years of service of the employee, including a fraction of

a year, not to exceed 3/4 of the average final compensation of the

employee. A plan may also pay early retirement benefits at 55 years

of age or older to the extent of actuarially equivalent benefits

not increasing the costs of the plan. Except as provided in

subsection (27), endowment policies, retirement benefits, pensions,

or annuity retirement benefits in excess of the amounts stipulated

in this subdivision may be provided for by a plan of employee

participation to cover the cost of the excess. If the employment or

the pension or retirement benefits of an employee who participated

in the cost of pension or retirement benefits are terminated before

the employee receives pension or retirement benefits equal to the

total amount of the employee's participation, the balance of the

total participation shall be refunded to the employee at the time

of termination, if living, or if deceased, to the employee's heir,

estate, legal representative, or designated beneficiary as provided

in the plan adopted and established by the county board of

commissioners. If a terminated employee is subsequently rehired by

the county, the employee may repay the amount of participation

refunded to the employee upon the employee's termination, together

with compound interest from the date of refund to the dates of

repayment at the rates provided in the plan. As conditions for

repayment, the plan may require return to employment for a period

not to exceed 3 years and may require that repayment be completed

within a period of not less than 1 year following return to

employment. A plan adopted for the payment of retirement benefits

or a pension shall grant benefits to an employee eligible for

pension or retirement benefits according to a uniform scale for all

persons in the same general class or classification. An employee

shall not be denied benefits by termination of his or her

employment after the employee becomes eligible for benefits under

the plan and this section. An endowment policy or annuity purchased

pursuant to this section shall be purchased from an insurer

authorized to write endowment policies or annuities in this state.

(2) In a plan adopted under this section, at least 60% of the

total pension or retirement benefit granted to an employee from

county funds shall consist of a percentage not to exceed 2.5% of

the employee's average final compensation times the employee's

years of service and shall be granted to each employee eligible for

retirement under the plan uniformly and without restriction or

limitation other than those prescribed in this section. As used in

this section:

(a) "Average final compensation" means the annual average of

the highest actual compensation received by a county employee,

other than a county employee who is a judge of a municipal court of

record subject to subsection (20) or a judge subject to subsection

(23), during a period of 5 consecutive years of service contained

within the employee's 10 years of service immediately before the

employee's retirement or a period of 5 years of service as

specified in the plan. In a county that adopts a plan for granting

longevity pay, the county board of commissioners may exclude this

longevity pay from average final compensation for the purpose of

computing the rate of employee contribution and the amount of

benefits payable to an employee upon retirement.

(b) "Longevity pay" means increments of compensation payable

at annual or semiannual intervals and based upon years of service

to the county, exclusive of compensation provided for a given class

of positions.

(3) A circuit court stenographer is eligible for membership

in, and the benefits of, a pension or retirement benefit under a

plan established pursuant to this section, or a social security

plan established by the county or 1 of the counties that pays a

portion of the compensation of a circuit court stenographer.

(4) If the employment of a county employee eligible to receive

a pension or retirement benefit under a plan established pursuant

to this section is terminated after the employee has completed 8 or

more years of service in county employment, the employee shall

receive the amount of pension or retirement benefit to which the

employee's service would have entitled the employee under the plan

established, if the employee waives the employee's right to a

refund of the employee's total participation upon the termination

of employment. The payment of pension or retirement benefits shall

begin, as provided in the plan, after the employee would have

become eligible for retirement under the plan had the employee's

employment not been terminated, but not later than 90 days after

the employee becomes 65 years of age. The payment of pension or

retirement benefits shall not begin until the employee has applied

for pension or retirement benefits in the manner prescribed in the

plan established.

(5) A plan established under this section may provide for

pension or retirement benefits for a county employee who becomes

totally disabled for work in the county service from any cause,

after not less than 10 years of county employment, to the extent of

the limitations provided in this section. A plan may also provide

for pension or retirement benefits to the extent of the limitations

provided in this section or $400.00 per month, whichever is the

greater sum, for an employee who becomes totally disabled for work

in the county service from causes that are the direct and proximate

result of county employment, to continue for the duration of the

disability or until the employee becomes eligible for retirement

pursuant to other provisions of the plan authorized by this

section. A plan may also provide for pension or retirement

benefits, to the extent of the limitations provided in this

section, for the actual dependents of a county employee who dies

while still employed by the county after not less than 10 years of

county employment, or who dies after leaving county employment with

not less than the number of years of service required to vest in

the plan but before becoming eligible to receive a pension or

retirement benefit. A plan may also provide for pension or

retirement benefits to the extent of the limitations provided in

this section or $400.00 per month, whichever is greater, for the

actual dependents of a deceased county employee whose death is the

direct and proximate result of county employment. The plan may

provide that the period from the end of the deceased or disabled

employee's period of service to the date that employee would have

become eligible for retirement be used as service for the sole

purpose of computing the amount of disability or death pension.

(6) As used in this section, "county employee" includes a

bailiff of the district court in the thirty-sixth district who

serves pursuant to section 8322 of the revised judicature act of

1961, 1961 PA 236, MCL 600.8322, and a person who receives more

than 50% of all compensation for personal services, rendered to

governmental units, from a county fund or county road fund, except

a person, other than a bailiff of the district court in the thirty-

sixth district, engaged for special services on a contract or fee

basis. Until December 31, 1979, a plan adopted under this section

may include as a county employee a person on leave of absence from

county employment who is not a member of another retirement system

except as a retirant and who pays or arranges payment of

contributions equal to the contributions that would have been

required to be paid under the plan by both the county and the

employee, based upon the compensation the employee would have

received from the county, if the employee had not taken a leave of

absence or a person who complies with the requirements of such a

provision approved for inclusion in a plan by the county board of

commissioners before January 1, 1976, who shall be considered to be

a county employee during the period of compliance. A plan adopted

under this section may exclude a person who is employed on a

temporary basis and a person employed in a position normally

requiring less than 1,000 hours, or some lesser specified number of

hours, work per year. A bailiff serving in the district court in

the thirty-sixth district is eligible to receive benefits under

this section if a plan has been established by law by which the

cost of benefits is payable from sources including charges on all

legal instruments in which the service of process by a bailiff is

required and earmarked by law for benefits, and contributions made

by the city of Detroit and each bailiff pursuant to section 8322(6)

of the revised judicature act of 1961, 1961 PA 236, MCL 600.8322.

The plan shall include provisions by which a bailiff or former

bailiff who served as bailiff as of January 1, 1967, may retire

after 25 years of service regardless of age, with maximum benefits

to be computed as follows: starting as of January 1, 1969, the

average of any 5 years of earnings of the previous 10 years served

in succession before retirement multiplied by 1.9% times the years

of service; starting as of June 1, 1975, the average of any 5 years

of earnings multiplied by 2% times the years of service. As used in

this subsection, "earnings" means the salary and fees, other than

mileage, received by a bailiff pursuant to section 8322(5) of the

revised judicature act of 1961, 1961 PA 236, MCL 600.8322. The plan

shall include provisions by which health, accident, and

hospitalization insurance premiums may be paid out of the earnings

of this fund. These payments shall be made at the discretion of the

pension board of trustees. A county that has a retirement fund for

bailiffs under this section shall annually review the retirement

fund and shall ensure that the fund is maintained in an actuarially

sound condition. Copies of the actuarial reports shall be provided

to the employer designated under section 8274(2) or (3) of the

revised judicature act of 1961, 1961 PA 236, MCL 600.8274, and to

the state court administrator.

(7) An employee while receiving a pension or retirement

benefit because of disability, pursuant to this section, may be

considered as employed in the county service for the purpose of

retirement under this section.

(8) A county employee who is included by law in another

pension or retirement system by reason of the compensation the

employee receives from the county may be excluded from a plan

established under this section or included only to the extent of

the difference between benefits granted under this section and the

other pension or retirement system.

(9) The county board of commissioners, upon the request of a

county employee, by not less than a 3/5 vote may credit that county

employee with the amount of government service resulting from

employment with the United States government, except military

service, employment with a state, or employment with any of their

political subdivisions under the following conditions:

(a) Employment by the county occurred within 15 years

following the county employee's separation from service of the last

unit of government by which the county employee was employed.

(b) Service rendered before the last break in service of more

than 15 years shall not be credited.

retirement allowance under a retirement system or other employer-

funded retirement benefit plan, except for a retirement benefit

plan under the social security act, ~~chapter 531, 49 Stat. 620~~ 42

USC 501 to 504, of the United States government, a state, or a

political subdivision of a state shall not be credited if the

county employee retired under a retirement system of the United

States government, a state, or any of their political subdivisions

or until the county employee irrevocably forfeits the right to the

deferred retirement allowance.

(d) The county employee deposits in the plan established under

this section an amount equal to the aggregate amount of

contributions the county employee would have made had the service

been acquired in the employ of the county, plus interest from the

dates the contributions would have been made to the date of

deposit, at rates determined by the county board of commissioners.

If records are insufficient or unavailable to compute the exact

amount of required deposit, the county board of commissioners may

estimate the amount.

(e) The county employee has 8 or more years of credited

service in county employment, has legal vesting in the county plan,

and deposits in the county employees' retirement system an amount

equal to the aggregate amount of contributions the employer would

have made had the government service being credited under this

section been acquired in the employ of the county.

(10) A plan adopted under this section may provide for annual

or less frequent postretirement redetermination of a pension. The

redetermined amount of pension shall be not greater than the amount

of pension otherwise payable multiplied by the sum of 100% and the

percentage the county board of commissioners determines appropriate

for each full year, excluding a fraction of a year, in the period

from the effective date of payments of the pension and the date as

of which the redetermination is being made. The redetermined amount

shall not be less than the amount of pension otherwise payable. A

provision of this section that limits the amount of a pension shall

not apply to the operation of this subsection redetermining the

amount of a pension. As used in this subsection, "the amount of

pension otherwise payable" means the amount of pension that would

be payable without regard to this subsection. The application of a

provision redetermining pension amounts may be restricted to

pensions that have an effective date of payment either before or

after a specified date.

(11) The cost of pension or retirement benefits for a county

employee under this section may be paid from the same fund from

which the employee receives compensation, and the county board of

commissioners may appropriate the necessary funds to carry out the

purposes of this section. If a county establishes a plan by which

the county pays pension or retirement benefits to an employee

pursuant to this section, the county, pursuant to provisions for

pension or retirement benefits that are incorporated in the plan,

shall establish and maintain reserves on an actuarial basis in the

manner provided in this subsection sufficient to finance the

pension and retirement and death benefit liabilities under the plan

and sufficient to pay the pension and retirement and death benefits

as they become due. A county that adopts a retirement plan under

this section and establishes reserves on an actuarial basis shall

maintain the reserves as provided in this subsection. The reserves

shall be determined by an actuarial valuation and established and

maintained by yearly appropriations by the county and contributions

by employees. The reserves shall be established, maintained, and

funded to cover the pension and other benefits provided for in the

plan in the same manner and within the same limits as to time as is

provided for Benefit Program B in the municipal employees

retirement system described in former section 14 of the municipal

employees retirement act of 1984, 1984 PA 427. These reserves are

trust funds and shall not be used for any other purpose than the

payment of pension, retirement, and other benefits and refunds of

employee contributions pursuant to the plan established in a

county. An employee's contributions shall be kept and accumulated

in a separate fund and used only for the payment of annuities and

refunds to employees. This subsection does not apply to a county

that adopted a retirement plan under this section and did not

establish reserves on an actuarial basis before October 11, 1947.

(12) If a county establishes a plan for the payment of pension

and retirement benefits to its employees pursuant to this section,

the county board of commissioners may provide for a board of

trustees to administer the plan and for the manner of election or

appointment of the members of the board of trustees. The county

board of commissioners may grant authority to the board of trustees

to fully administer and operate the plan and to deposit, invest,

and reinvest the funds and reserves of the plan within the

limitations prescribed by the county board of commissioners in the

plan. The county board of commissioners may authorize the

investment of funds of a county retirement plan established under

this section in anything in which the funds of the state employees'

retirement system or the funds of the municipal employees

retirement system may be invested, pursuant to the state employees'

retirement act, 1943 PA 240, MCL 38.1 to 38.69, and the municipal

employees retirement act of 1984, 1984 PA 427, MCL 38.1501 to

38.1555. A county retirement plan established under this section

may provide for financing, funding, and the payment of benefits in

the same manner and to the same extent as is provided for in the

state employees' retirement act, 1943 PA 240, MCL 38.1 to 38.69,

and the municipal employees retirement act of 1984, 1984 PA 427,

MCL 38.1501 to 38.1555, may provide for and require contributions

by county employees, and may permit additional employee

contributions on a voluntary basis.

(13) Upon the approval of the county board of commissioners, a

member who entered the armed service of the United States before

June 1, 1980 or who entered the armed service of the United States

on or after June 1, 1980 during a time of war or emergency

condition as described in section 1 of 1965 PA 190, MCL 35.61, may

elect to receive credited service for not more than 5 years of

active military service. Credit for military service shall be given

upon request and payment to the retirement system of an amount

equal to 5% of the member's full-time or equated full-time annual

compensation for the year in which payment is made multiplied by

the number of years, and fraction of a year, of credited service

that the member elects to purchase up to the maximum. Service shall

not be credited if the service is or would be credited under any

other federal, state, or local publicly supported retirement

system, except for service that is or would be credited under the

federal government for services in the reserve. Service shall not

be credited under this subsection until the member has the number

of years of credited service needed to vest under the plan. Only

completed years and months of armed service shall be credited under

this subsection.

(14) A member who enters or entered any armed service of the

United States may purchase credited service for periods of

continuous active duty lasting 30 days or more, subject to the

following conditions:

(a) The county board of commissioners authorizes the purchase

of credited service under this subsection by an affirmative vote of

a majority of the members of the county board of commissioners. The

county board of commissioners shall establish a written policy to

implement the provisions of this subsection in order to provide

uniform application of this subsection to all members of the plan.

(b) The member has at least the number of years of credited

service needed to vest under the plan, not including any credited

service purchased under this subsection and subsection (13).

compensation multiplied by the period of credited service being

purchased. As used in this subdivision, "annual compensation" means

the aggregate amount of compensation paid the member during the 4

most recent calendar quarters for each of which the member was

credited 3/12 of a year of credited service.

(d) Fractional months of armed service shall not be recognized

for the purposes of this subsection.

(e) Armed service credited a member under subsection (13)

shall not be the basis of credited service under this section.

(f) Armed service credited a member under this subsection

shall not exceed either 5 years or the difference between 5 years

and the armed service credited the member under subsection (13).

(g) Credited service shall not be granted for periods of armed

service that are or could be used for obtaining or increasing a

benefit from another retirement system, except for service that is

or would be credited under the federal government for services in

the reserve.

(15) As used in this subsection, "transitional public

employment program" means a public service employment program in

the area of environmental quality, health care, education, public

safety, crime prevention and control, prison rehabilitation,

transportation, recreation, maintenance of parks, streets, and

other public facilities, solid waste removal, pollution control,

housing and neighborhood improvements, rural development,

conservation, beautification, veterans' outreach, or any other area

of human betterment and community improvement as part of a program

of comprehensive manpower services authorized, undertaken, and

financed pursuant to the former comprehensive employment and

training act of 1973, Public Law 93-203. A person participating in

a transitional public employment program shall not be eligible for

membership in a retirement system or pension plan established under

this section. If the person later becomes a member of a retirement

system or pension plan established under this section within 12

months after the date of termination as a participant in a

transitional public employment program, service credit shall be

given for employment in the transitional public employment program

for purposes of determining a retirement allowance upon the payment

by the person and the person's employer under the transitional

public employment program from funds provided under the former

comprehensive employment and training act of 1973, Public Law 93-

203, as funds permit, to the retirement system of the

contributions, plus regular interest, the person and the employer

would have paid had the employment been rendered in a position

covered by this section. During the person's employment in the

transitional public employment program, the person's employer shall

provide an opportunity by payroll deduction for the person to make

his or her employee contribution to the applicable pension system.

To provide for the eventual payment of the employer's contribution,

the person's employer shall during this same period place in

reserve a reasonable but not necessarily an actuarially determined

amount equal to the contributions that the employer would have paid

to the retirement system for those employees in the transitional

public employment program as if they were members under this

section, but only for that number of employees that the employer

determined would transfer from the transitional public employment

program into positions covered by this section. If the funds

provided under the former comprehensive employment and training act

of 1973, Public Law 93-203, are insufficient, the remainder of the

employer contributions shall be paid by the person's current

employer.

(16) Subsection (15) does not exclude the participant in a

transitional public employment program from the accident,

disability, or other benefits available to members of the

retirement system covered by this section.

(17) If a probate judge who is a member of a plan established

under this section contributes for 20 years or more, the county

board of commissioners may allow the probate judge to cease further

contributions.

(18) An employee of the circuit court in the third judicial

circuit, the common pleas court of the city of Detroit, or the

recorder's court of the city of Detroit who became an employee of

the state judicial council on September 1, 1981, and who was 44

years of age or older as of that date, and who will have

accumulated 25 or more years of service credit by September 1,

1987, shall continue to be eligible for membership in, and the

benefits of, a pension or retirement benefit plan established

pursuant to this section in the same manner as the employee was

eligible before September 1, 1981. A person who was an employee of

the circuit court in the third judicial circuit, the common pleas

court of the city of Detroit, or the recorder's court of the city

of Detroit on August 31, 1981, who last entered county employment

before November 2, 1956, who became an employee of the state

judicial council on September 1, 1981, and who accumulated not less

than 24 years of service credit by August 31, 1981, shall continue

to be eligible for membership in, and the benefits of, a pension or

retirement benefit plan established pursuant to this section in the

same manner as the employee was eligible before September 1, 1981.

An election to continue to be a member of a pension or retirement

benefit plan established pursuant to this section as authorized by

section 594(2) of the revised judicature act of 1961, 1961 PA 236,

MCL 600.594, as that section read on February 8, 1985, or former

section 36(2) of 1919 PA 369, is not effective unless the employee

has made the election in the manner prescribed by those sections

and has made the payments required by those sections.

(19) A plan adopted under this section may provide that an

employee of the circuit court in the third judicial circuit, the

common pleas court of the city of Detroit, or the recorder's court

of the city of Detroit who is a member of the Wayne county

employees' retirement system on August 31, 1981, who becomes an

employee of the state judicial council and a member of the state

employees' retirement system on September 1, 1981, receive a

benefit based on the annual average of the highest actual

compensation received by the employee during a period of 5 years of

county or state service.

(20) Beginning September 1, 1981, for determining the

retirement benefit for a county employee who is a judge of a

municipal court of record pursuant to subsection (2), "average

final compensation" means the annual average of the highest actual

compensation received by the judge as additional salary pursuant to

former section 13(2) of 1919 PA 369, or section 9932(3) of the

revised judicature act of 1961, 1961 PA 236, MCL 600.9932, during a

period of 5 years of service as specified in the plan. This

subsection shall not be construed to diminish or impair an accrued

financial benefit.

(21) Beginning September 1, 1981, for each county employee who

is a judge of a municipal court of record, or of the circuit or

district court, the sum of the average final compensation

determined for that county employee pursuant to this section and

the final salary determined for that county employee as a member of

the state of Michigan judges' retirement system created by former

1951 PA 198, or as a member of the Michigan judges retirement

system created by the judges retirement act of 1992, 1992 PA 234,

MCL 38.2101 to 38.2670, shall not exceed the employee's total

annual judicial salary payable from all sources at the time of his

or her retirement. This subsection shall not be construed to

diminish or impair an accrued financial benefit.

(22) Beginning September 1, 1981, for each county employee who

is a judge of the probate court, the sum of the average final

compensation calculated for that employee pursuant to this section

and the final salary calculated for that employee as a member of

the state of Michigan probate judges retirement system created by

former 1954 PA 165 or as a member of the Michigan judges retirement

system created by the judges retirement act of 1992, 1992 PA 234,

MCL 38.2101 to 38.2670, shall not exceed the employee's total

annual judicial salary payable from all sources at the time of his

or her retirement. This subsection shall not be construed to

diminish or impair an accrued financial benefit.

(23) Beginning September 1, 1981, for determining a retirement

benefit pursuant to subsection (2) for a county employee who is a

judge who receives an annuity pursuant to section 14(5) of former

1951 PA 198 or pursuant to section 503(2)(c) of the judges

retirement act of 1992, 1992 PA 234, MCL 38.2503, "average final

compensation" means the difference between the judge's total annual

salary payable from all sources on August 31, 1981, and the judge's

state base salary payable on August 31, 1981. This subsection shall

not be construed to diminish or impair an accrued financial

benefit.

(24) Beginning January 1, 1983, the sum of the final salary

determined for each county employee who is a judge of the probate

court used as the basis for determining the judge's retirement

allowance as a member of a retirement system established pursuant

to this section and the salary or compensation figure used as the

basis for determining the judge's retirement allowance as a member

of the state of Michigan judges' retirement system created by

former 1951 PA 198 or as a member of the Michigan judges retirement

system created by the judges retirement act of 1992, 1992 PA 234,

MCL 38.2101 to 38.2670, shall not exceed the judge's total annual

salary payable from all sources at the time of his or her

retirement. This subsection shall not be construed to diminish or

impair an accrued financial benefit.

(25) The county board of commissioners, upon the request of a

county employee, by not less than a 3/5 vote may credit that county

employee with the amount of membership service that the county

employee was previously credited with by the retirement system

established under this section under the following conditions:

(a) The membership service previously credited to the county

employee was service rendered for the same county.

(b) Service that is recognized for the purpose of a deferred