January 31, 2012, Introduced by Rep. Heise and referred to the Committee on Appropriations.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
(MCL 38.1301 to 38.1437) by adding section 81d.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 81d. (1) Notwithstanding section 81, a member may retire
with a retirement allowance computed according to this section if
all of the following apply:
(a) The member files a written application with the retirement
board within the incentivized retirement application period stating
a retirement allowance effective date that is on or after July 1,
2012 but not later than September 1, 2012. A member may withdraw a
written application submitted by a member on or before June 11,
2012. A written application submitted by a member and not withdrawn
on or before June 11, 2012 is irrevocable.
(b) On the last day of the month immediately preceding the
retirement allowance effective date stated in the application, the
member's combined age and length of credited service is equal to or
greater than 80 years or the member is eligible to retire under
section 81 with a retirement allowance that is not subject to
reduction under section 84(2).
(c) The member was employed as a public school employee for
the 6-month period ending May 1, 2012. A member who has worked in
the 6-month period ending May 1, 2012 and is on layoff or on an
approved leave of absence status from reporting unit employment is
considered to have met the employment requirement of this
subdivision.
(2) Upon his or her retirement as provided in this section, a
member who retires with a retirement effective date on or before
September 1, 2012 shall receive a retirement allowance equal to the
member's number of years and fraction of a year of credited service
multiplied by 1.6% of the member's final average compensation if
the final average compensation is $90,000.00 or less and the member
is eligible to retire under section 81 with a retirement allowance
that is not subject to reduction under section 84(2). If the member
is eligible to retire under section 81 with a retirement allowance
that is not subject to reduction under section 84(2) and has a
final average compensation that is greater than $90,000.00, the
retirement allowance shall be equal to the member's number of years
and fraction of a year of credited service multiplied by 1.6% of
his or her final average compensation up to a final average
compensation of $90,000.00 and the remaining portion of the
retirement allowance shall be equal to the member's number of years
and fraction of a year of credited service multiplied by 1.5% of
the portion of final average compensation over $90,000.00. For
members eligible under this section because the member's combined
age and length of credited service is equal to or greater than 80
years, upon his or her retirement as provided in this section, a
member who retires with a retirement effective date on or before
September 1, 2012 shall receive a retirement allowance equal to the
member's number of years and fraction of a year of credited service
multiplied by 1.55% of the member's final average compensation if
the final average compensation is $90,000.00 or less. For members
eligible to retire under this section because the member's combined
age and length of credited service is equal to or greater than 80
years whose final average compensation is greater than $90,000.00,
the retirement allowance shall be calculated so that the member
receives a portion of his or her retirement allowance equal to the
member's number of years and fraction of a year of credited service
multiplied by 1.55% of his or her final average compensation up to
a final average compensation of $90,000.00 and the remaining
portion of the retirement allowance shall be calculated as equal to
the member's number of years and fraction of a year of credited
service multiplied by 1.5% of the portion of final average
compensation over $90,000.00.
(3) Except as otherwise provided in this subsection, the
superintendent for a reporting unit or the chief administrator for
a reporting unit that does not have a superintendent may extend the
effective date of retirement under subsection (1) of a member
employed by that reporting unit to a date not later than September
1, 2013. Each reporting unit having a member who elects to retire
under this section may extend the retirement effective date of 1
member under this section. Up to an additional 2,500 extensions
shall be allotted to reporting units using a pro-rata methodology
determined by the retirement system. The retirement system shall
notify reporting units of any additional extension allotments by
May 22, 2012. To make an extension under this subsection, the
superintendent or chief administrator shall submit to the
retirement system notification of members whose retirement dates
the superintendent or chief administrator will extend along with
the written concurrence of the member on or before June 15, 2012.
The superintendent or chief administrator shall not request, and
the retirement system shall not implement, the extension of a
member that exceeds the number of extensions allotted to his or her
reporting unit.
(4) For purposes of this section, "incentivized retirement
application period" means the period beginning on the effective
date of the amendatory act that added this section and ending on
June 11, 2012.
(5) Any additional costs to the retirement system as a result
of the retirement allowance calculations under this section shall
be amortized over a 5-year period.