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ACT NO. 53

(H.549)

State Employees; Teachers and Municipal Employees Systems,

Miscellaneous Adjustments

This act makes miscellaneous adjustments to state employees', teachers' and municipal employees' retirement systems and thereby eliminate some of the inequities among the systems.

(a) State Employees. For the state employees' system, the act, among other things: authorizes early retirement benefits for persons who are no longer state employees but are vested and have elected to remain in the system; eliminates the early retirement reduction for group A members who have completed 30 years of service; sets out how benefits will be calculated for a dependent beneficiary when the member dies prior to his or her normal retirement date; adds "pop up" features for a member who elects certain survivorship options and is predeceased by his or her named beneficiary or is divorced from the named beneficiary and enters into a plan-approved domestic relations order; authorizes certain exempt members of the system who are no longer employed by the state to elect to participate in the defined contribution plan; grants up to three years of credit to qualifying state employees for military service during the Korean and Viet Nam conflict periods; permits a member to elect to purchase credit for years of service as a municipal employee; and directs the legislature to study issues involved in making benefit enhancements available to retirees.

(b) Teachers. For the teacher's system, the act, among other things: authorizes a "pop up" feature for a member who elects certain survivorship options, is divorced from his or her named beneficiary and enters into a plan-approved domestic relations order; reduces the contribution rate for group C members from three and seven-tenths to three and four-tenths percent of earnable compensation; and permits a member to elect to purchase credit for years of service as a state or municipal employee.

(c) Municipal Employees. For the municipal employees' system. The act, among other things: authorizes changes in the normal retirement date; permits beneficiaries of the teachers' system to become members of the municipal system; allows a member to elect to purchase credit for years of service as a state or municipal employee or a teacher in a public or private school; establishes a maximum benefit of 60 percent of average final compensation for group A and group B members and establishes how the normal retirement allowance for group B members hired on or after July 1, 1999 will be calculated; provides for cost of living adjustments for members who terminated their service prior to retirement; sets out how benefits will be calculated for a dependent beneficiary when the member dies prior to his or her normal retirement date; adds "pop up" features for a member who elects certain survivorship options and is predeceased by his or her named beneficiary or is divorced from the named beneficiary and enters into a plan-approved domestic relations order; provides for membership effective upon the date the employee is hired; gives the legislative body the options for "picking up and paying" employee contribution; and authorizes defined contribution retirement plans.

In addition, the act makes grants to certain individuals who were members of the teachers' system but withdrew their contributions prior to July 1, 1980.

Effective Date: July 1, 1999