HOUSE BILL No. 4182
February 13, 2001, Introduced by Reps. Wojno, Spade, Dennis, Callahan, Whitmer, Jacobs and Faunce and referred to the Committee on Appropriations. A bill to amend 1937 PA 345, entitled "Fire fighters and police officers retirement act," by amending section 6 (MCL 38.556), as amended by 1991 PA 54. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 6. (1) Age and service retirement benefits payable 2 under this act are as follows: 3 (a) A member who is 55 years of age or older and who has 25 4 or more years of service as a police officer or fire fighter in 5 the employ of the municipality affected by this act may retire 6 from service upon written application to the retirement board 7 stating a date, not less than 30 days or more than 90 days after 8 the execution and filing of the application, on which the member 9 desires to be retired. The retirement board shall grant the 10 benefits to which the member is entitled under this act, unless 11 the member continues employment. If the member continues 00750'01 MRM 2 1 employment, the member's pension shall be deferred with service 2 years of credit until actual retirement. Upon the approval of 3 the legislative body or the electors of a municipality under this 4 act, a member under 50 years of age who has 25 or more years of 5 service, or without the necessity for approval, a member 50 years 6 of age or more who has 25 or more years of service, may leave 7 service and receive the full retirement benefits payable through- 8 out the member's life as provided in subdivision (e). 9 (b) A member who is 60 years of age or older shall be 10 retired by the retirement board upon the written application of 11 the legislative body, or board or official provided in the 12 charter of the municipality as head of the department in which 13 the member is employed. Upon retirement, the retirement board 14 shall grant the benefits to which the member is entitled under 15 this act, unless the member continues employment. If the member 16 continues employment, the member's pension shall be deferred with 17 service years of credit until actual retirement. 18 (c) A member who is 65 years of age shall be retired by the 19 retirement board on the first day of the month following attain- 20 ment of 65 years of age. 21 (d) A member who has 10 or more years of service shall have 22 vested retirement benefits that are not subject to forfeiture on 23 account of disciplinary action, charges, or complaints. If the 24 member leaves employment before the date the member would have 25 first become eligible to retire as provided in subdivision (a) 26 for any reason except the member's retirement or death, the 27 member is entitled to a pension that shall begin the first day of 00750'01 3 1 the calendar month immediately after the month in which the 2 member's written application for the pension is filed with the 3 retirement board that is on or after the date the member would 4 have been eligible to retire had the member continued in 5 employment. The retirement board shall grant the member the ben- 6 efits to which the member is entitled under this act, unless the 7 member resumes service. If the member resumes service, the 8 member's pension shall be further deferred with service years of 9 credit until the member actually retires. 10 (e) Upon retirement from service as provided in this subsec- 11 tion, a member shall receive a regular retirement pension payable 12 throughout the member's life of 2% of the member's average final 13 compensation multiplied by the first 25 years of service credited 14 to the member, plus 1% of the member's average final compensation 15 multiplied by the number of years, and fraction of a year, of 16 service rendered by the member in excess of 25 years. A munici- 17 pality under this act, upon approval of the legislative body or 18 the electors of the municipality, may increase the percentage of 19 the payment from 2% up to a maximum of 2.5%. If an increase is 20 approved, the increase shall not be reduced for members under the 21 system at the time of the increase. The legislative body may 22 also increase the percentage of employee contributions. If a 23 retired member dies before the total of regular pension payments 24 received by the member equals the total of the member's contribu- 25 tions made to the retirement system, the difference between the 26 member's total contributions and the total of the member's 27 regular retirement pension payments received shall be paid in a 00750'01 4 1 single sum to the person or persons the member nominates by 2 written designation duly executed and filed with the retirement 3 board. If there is not a person or persons surviving the retired 4 member, the difference, if any, shall be paid to the retired 5 member's legal representative or estate. 6 (f) As used in this section, "average final compensation" 7 means the average of the highest annual compensation received by 8 a member during a period of 5 consecutive years of service con- 9 tained within the member's 10 years of service immediately pre- 10 ceding the member's retirement or leaving service. However, if 11 so provided in a collective bargaining agreement entered into 12 between a municipality under this act and the appropriate recog- 13 nized bargaining agent, average final compensation may mean the 14 average of the 3 years of highest annual compensation received by 15 a member during the member's 10 years of service immediately pre- 16 ceding the member's retirement or leaving service. If the member 17 has less than 5 years of service, average final compensation 18 means the annual average compensation received by the member 19 during his or her total years of service. 20 (g) A member shall be given service credit for time spent in 21 the military, naval, marine, or other armed service of the United 22 States government during time of war, or other national emergency 23 recognized by the board, if the member was employed by the munic- 24 ipality at the time of entry into the armed service, and is or 25 was reemployed by the municipality as a police officer or fire 26 fighter within 6 months after the date of termination of his or 27 her required enlistment or assignment in the armed service. A 00750'01 5 1 municipality by a 3/5 vote of its governing body or by a majority 2 vote of the qualified electors may provide service credit for not 3 more than 6 years of active military service to the United States 4 government to a member who is employed subsequent to this mili- 5 tary service upon payment to the retirement system of 5% of the 6 member's full-time or equated full-time compensation for the 7 fiscal year in which payment is made multiplied by the years of 8 service that the member elects to purchase up to the maximum. 9 Service is not creditable if it is or would be creditable under 10 any other federal, state, or local publicly supported retirement 11 system. However, this restriction does not apply to those per- 12 sons who have or will have acquired retirement eligibility under 13 the federal government for service in the reserve. A member 14 shall be given service credit for the time the member is absent 15 from active service without full pay on account of sickness or 16 injury. If the absence from active service is due to nonservice 17 connected sickness or injury, not more than 60 days of the 18 absence shall be credited as service in any 1 calendar year, as 19 determined by the retirement board. 20 (h) Before the effective date of the member's retirement as 21 provided in this subsection, but not after the effective date of 22 the member's retirement, a member may elect to receive his or her 23 benefit in a pension payable throughout the member's life, called 24 a regular retirement pension, or the member may elect to receive 25 the actuarial equivalent, computed as of the effective date of 26 retirement, of the member's regular retirement pension in a 27 reduced retirement pension payable throughout the member's life, 00750'01 6 1 and nominate a survivor beneficiary, pursuant to an option 2 provided in this subdivision. Upon the death of a retirant who 3 retires on or after July 1, 1975, and who is receiving a regular 4 retirement pension, his or her spouse, if living, shall receive a 5 pension equal to 60% of the regular retirement pension the 6 deceased retirant was receiving. Benefits shall not be paid 7 under this subdivision on account of the death of a retirant if 8 the member elected to receive his or her pension under an option 9 provided in this subdivision. As used in this subsection, 10 "spouse" means the person to whom the retirant was legally mar- 11 ried on both the effective date of retirement and the date of 12 death. Except as otherwise provided in this act, if a member 13 fails to elect an option before the effective date of retirement, 14 then the pension shall be paid as a regular retirement pension. 15 A member may elect 1 of the following options: 16 (i) Option I. Upon the death of a retired member, his or 17 her reduced retirement pension shall be continued throughout the 18 life of and paid to the person, having an insurable interest in 19 the retired member's life, that the member nominated by written 20 designation duly executed and filed with the retirement board 21 before the effective date of the member's retirement. 22 (ii) Option II. Upon the death of a retired member, 1/2 of 23 his or her reduced retirement pension shall be continued through- 24 out the life of and paid to the person, having an insurable 25 interest in the retired member's life, that the member nominated 26 by written designation duly executed and filed with the 00750'01 7 1 retirement board before the effective date of the member's 2 retirement. 3 (i) If a member continues in service on or after the date of 4 acquiring 20 years of service credit, does not have an option I 5 election provided for in subdivision (j) in force, and dies while 6 in service of the municipality before the effective date of the 7 member's retirement, leaving a surviving spouse, the spouse shall 8 receive a pension computed in the same manner as if the member 9 had retired effective the day preceding the date of the member's 10 death, elected option I provided for in subdivision (h), and nom- 11 inated the spouse as survivor beneficiary. Upon the death of the 12 spouse the pension shall terminate. A pension shall not be paid 13 under this subdivision on account of the death of a member if 14 benefits are paid under subsection (2) on account of the member's 15 death. 16 (j) A member who continues in service on or after the date 17 of acquiring 25 years of service credit may, at any time before 18 the effective date of the member's retirement, by written decla- 19 ration duly executed and filed with the board in the manner and 20 form prescribed by the board, elect option I provided for in sub- 21 division (h) and nominate a survivor beneficiary whom the board 22 finds to be dependent upon the member for at least 50% of the 23 beneficiary's support. If a member who has an option I election 24 provided for in this subdivision in force dies while in service 25 before the effective date of the member's retirement, the 26 member's survivor beneficiary shall immediately receive the same 27 pension that the survivor beneficiary would have been entitled to 00750'01 8 1 receive under the option I if the member had retired pursuant to 2 this act effective the day preceding the date of the member's 3 death, notwithstanding that the member may not have attained 55 4 years of age. If a member who has an option I election provided 5 for in this subdivision in force subsequently retires pursuant to 6 this act, the member, within 90 days immediately preceding the 7 effective date of the member's retirement, but not after the 8 effective date of the member's retirement, may elect an option 9 provided for in subdivision (h). The option election is effec- 10 tive as of the effective date of the member's retirement. A pen- 11 sion shall not be paid under this subdivision on account of the 12 death of a member if benefits are paid under subsection (2) on 13 account of the member's death. 14 (k) If a retirant receiving a reduced retirement pension 15 under subdivision (h)(i) or (ii) is divorced from the spouse who 16 had been named the retirant's survivor beneficiary under subdivi- 17 sion (h)(i) or (ii), the election of a reduced retirement pension 18 payment option shall be considered void by the retirement system 19 if the judgment of divorce or award or order of the court, or an 20 amended judgment of divorce or award or order of the court, 21 described in section 9 and dated after the effective date of the 22 amendatory act that added this subdivision JUNE 27, 1991 pro- 23 vides that the election of a reduced retirement pension payment 24 option under subdivision (h)(i) or (ii) is to be considered void 25 by the retirement system and the retirant provides a certified 26 copy of the judgment of divorce or award or order of the court, 27 or an amended judgment of divorce or award or order of the court, 00750'01 9 1 to the retirement system. If the election of a reduced 2 retirement pension payment option under subdivision (h)(i) or 3 (ii) is considered void by the retirement system under this sub- 4 section, the retirant's retirement pension shall revert to a reg- 5 ular retirement pension, including postretirement adjustments, if 6 any, subject to an award or order of the court as described in 7 section 9. The retirement pension shall revert to a regular 8 retirement pension under this subdivision effective the first of 9 the month after the date the retirement system receives a certi- 10 fied copy of the judgment of divorce or award or order of the 11 court. This subdivision does not supersede a judgment of divorce 12 or award or order of the court in effect on the effective date 13 of the amendatory act that added this subdivision JUNE 27, 14 1991. This subdivision does not require the retirement system to 15 distribute or pay retirement assets on behalf of a retirant in an 16 amount that exceeds the actuarially determined amount that would 17 otherwise become payable if a judgment of divorce had not been 18 rendered. 19 (2) Disability and service connected death benefits payable 20 under this act are as follows: 21 (a) To a surviving spouse, a duty death pension of the same 22 amount each week as that which has been paid the surviving spouse 23 under the worker's disability compensation act of 1969, Act 24 No. 317 of the Public Acts of 1969, being sections 418.101 to 25 418.941 of the Michigan Compiled Laws 1969 PA 317, MCL 418.101 26 TO 418.941, to become due and payable on the termination of the 27 payments to the surviving spouse by a municipality under Act 00750'01 10 1 No. 317 of the Public Acts of 1969 THE WORKER'S DISABILITY 2 COMPENSATION ACT OF 1969, 1969 PA 317, MCL 418.101 TO 418.941, 3 and to continue for the surviving spouse's life. or until his or 4 her remarriage. 5 (b) If death results to a member in the line of duty, and 6 the member leaves surviving children, the children shall be paid 7 a pension of the same amount as that which has been paid to them 8 as a weekly benefit under Act No. 317 of the Public Acts of 9 1969 THE WORKER'S DISABILITY COMPENSATION ACT OF 1969, 1969 10 PA 317, MCL 418.101 TO 418.941, to become due and payable upon 11 termination of the payments under Act No. 317 of the Public Acts 12 of 1969 THE WORKER'S DISABILITY COMPENSATION ACT OF 1969, 1969 13 PA 317, MCL 418.101 TO 418.941, and to continue to each surviving 14 child until he or she attains 18 years of age, or until his or 15 her marriage or death before attaining 18 years of age. 16 (c) If death results to a member in the line of duty and the 17 member leaves other surviving dependents, the dependents shall 18 receive a pension of the same amount as that which has been paid 19 to them as a weekly benefit under Act No. 317 of the Public Acts 20 of 1969 THE WORKER'S DISABILITY COMPENSATION ACT OF 1969, 1969 21 PA 317, MCL 418.101 TO 418.941, to become due and payable upon 22 termination of the payments under Act No. 317 of the Public Acts 23 of 1969 THE WORKER'S DISABILITY COMPENSATION ACT OF 1969, 1969 24 PA 317, MCL 418.101 TO 418.941, and to continue until the time 25 the retirement board determines that the need for a pension no 26 longer exists. 00750'01 11 1 (d) Upon the application of a member or the member's 2 department head, a member who becomes totally incapacitated for 3 duty by reason of a personal injury or disease occurring as the 4 natural and proximate result of causes arising out of and in the 5 course of the member's employment by the municipality shall be 6 retired by the retirement board. The member shall be given a 7 medical examination by a medical committee consisting of a physi- 8 cian named by the retirement board, a physician named by the 9 member claiming benefits, and a third physician designated by the 10 first 2 physicians named. The medical committee, if determined 11 by a majority opinion, shall certify in writing that the member 12 is mentally or physically incapacitated for the further per- 13 formance of duty as a police officer or fire fighter in the serv- 14 ice of the municipality; that the incapacity is likely to be per- 15 manent; and that the member should be retired. Upon retirement 16 for disability as provided in this subdivision, a member who has 17 not attained 55 years of age shall receive a disability retire- 18 ment pension of 50% of the member's average final compensation, 19 which shall be determined according to subsection (1)(f), and 20 shall be payable until the member becomes 55 years of age. Upon 21 becoming 55 years of age, the disabled member shall receive a 22 disability retirement pension computed according to subsection 23 (1)(e). In computing the disability retirement pension, the 24 member shall be given service credit for the period of receipt of 25 a disability retirement pension before attainment of 55 years of 26 age. If a member retired after attaining 55 years of age on 27 account of disability, as provided in this subdivision, the 00750'01 12 1 member shall receive a disability retirement pension computed 2 according to subsection (1)(e), notwithstanding that the member 3 may not have 25 years of service credit. The disability retire- 4 ment pension provided for in this subdivision is subject to sub- 5 divisions (f) and (g). 6 (e) Upon the application of a member or the member's depart- 7 ment head, a member in service who has 5 or more years of service 8 credit and who becomes totally and permanently incapacitated for 9 duty by reason of a personal injury or disease occurring as the 10 result of causes arising outside the course of the member's 11 employment by the municipality may be retired by the retirement 12 board. The member shall be given a medical examination by a med- 13 ical committee consisting of a physician named by the retirement 14 board, a physician named by the member claiming benefits, and a 15 third physician designated by the first 2 physicians named. The 16 medical committee, if determined by a majority opinion, shall 17 certify in writing that the member is mentally or physically 18 incapacitated for the further performance of duty as a police 19 officer or fire fighter in the service of the municipality, that 20 the incapacity is likely to be permanent, and that the member 21 should be retired. Upon retirement for disability, as provided 22 in this subdivision, a member who has not attained 55 years of 23 age shall receive a disability retirement pension until the 24 member becomes 55 years of age, recovers, or dies, whichever 25 occurs first, of 1.5% of the member's average final compensation 26 multiplied by the number of years of service credited to the 27 member. Upon becoming 55 years of age, the member's disability 00750'01 13 1 retirement pension shall be increased to 2% of the member's 2 average final compensation multiplied by the number of years of 3 service credited to the member at the time of his or her 4 retirement. Upon retirement for disability as provided in this 5 subdivision, a member who is 55 years of age or older shall 6 receive a disability retirement pension computed according to 7 subsection (1)(e). This THE DISABILITY RETIREMENT PENSION PRO- 8 VIDED FOR IN THIS subdivision is subject to subdivisions (f) and 9 (g). 10 (f) At least once each year during the first 5 years after 11 the retirement of a member with a disability retirement pension 12 and at least once in every 3-year period after disability retire- 13 ment, the retirement board may, and upon the retired member's 14 application shall, require a retired member who has not attained 15 55 years of age to undergo a medical examination. The medical 16 examination shall be given by or under the direction of a physi- 17 cian, designated by the retirement board, at the place of resi- 18 dence of the retired member or other place mutually agreed upon. 19 If a retired member who has not attained 55 years of age refuses 20 to submit to the medical examination in the period, the member's 21 disability retirement pension may be discontinued by the retire- 22 ment board. If the member's refusal continues for 1 year, all 23 the member's rights in and to his or her disability retirement 24 pension may be revoked by the retirement board. If upon a medi- 25 cal examination of the retired member the physician reports to 26 the retirement board that the retired member is physically able 27 and capable of resuming employment in the classification held by 00750'01 14 1 the member at the time of retirement, the member shall be 2 restored to active service in the employ of the municipality and 3 payment of the disability retirement pension shall cease if the 4 report of the physician is concurred in by the retirement board. 5 A retired member restored to active service shall again become a 6 member of the retirement system from the date of return to 7 service. The member shall contribute to the retirement system 8 after restoration to active service in the same manner as before 9 the member's disability retirement. Service credited to the 10 member at the time of disability retirement shall be restored to 11 full force and effect. The member shall be given service credit 12 for the period the member was receiving a duty disability retire- 13 ment pension provided for in subdivision (d), but shall not be 14 given service credit for the period the member was receiving a 15 nonduty disability retirement pension provided for in subdivision 16 (e). Amounts paid under Act No. 317 of the Public Acts of 1969 17 THE WORKER'S DISABILITY COMPENSATION ACT OF 1969, 1969 PA 317, 18 MCL 418.101 TO 418.941, to a retired member shall be offset 19 against and payable in place of benefits provided under this 20 act. If the benefits under Act No. 317 of the Public Acts of 21 1969 THE WORKER'S DISABILITY COMPENSATION ACT OF 1969, 1969 22 PA 317, MCL 418.101 TO 418.941, are less than the benefits pay- 23 able under this act, the amount to be paid out of the funds of 24 the retirement system shall be the difference between the bene- 25 fits provided under Act No. 317 of the Public Acts of 1969 THE 26 WORKER'S DISABILITY COMPENSATION ACT OF 1969, 1969 PA 317, 27 MCL 418.101 TO 418.941, and the benefits provided in this act. 00750'01 15 1 Upon the termination of benefits under Act No. 317 of the Public 2 Acts of 1969 THE WORKER'S DISABILITY COMPENSATION ACT OF 1969, 3 1969 PA 317, MCL 418.101 TO 418.941, the benefits shall be paid 4 pursuant to this act. 5 (g) Within 60 days before a member becomes 55 years of age, 6 or before retirement from service if retirement occurs after the 7 member becomes 55 years of age, a disabled member who is retired 8 as provided in subdivision (d) or (e) may elect to continue to 9 receive a disability retirement pension as a benefit terminating 10 at death, to be known as a regular disability pension, or may 11 elect to receive the actuarial equivalent, at that time, of a 12 regular disability pension in a reduced disability pension pay- 13 able throughout life pursuant to an option provided in subsection 14 (1)(h). If a disabled member fails to elect an option, as pro- 15 vided in this subdivision, before becoming 55 years of age or 16 before retirement, the member's retirement pension shall be paid 17 to the member as a regular disability pension terminating at 18 death. If a disabled member who has not elected an option pro- 19 vided in subsection (1)(h) dies before the total of the member's 20 regular disability pension payments received equals or exceeds 21 the total of the member's contributions made to the retirement 22 system, the remainder, if any, shall be paid in a single sum to 23 the person or persons nominated by the member by written designa- 24 tion duly executed and filed with the board. If there is not a 25 designated person or persons surviving, then the remainder, if 26 any, shall be paid to the retired member's legal representative 27 or estate. 00750'01 Final page.