ACT NO. 158
State Employees; Teachers; Municipal Employees; Retirement Systems; Miscellaneous Adjustments
This act makes miscellaneous adjustments to the retirement systems of state employees, teachers and municipal employees. Specifically, this act does the following:
· Air Time Option: Allows a state employee or teacher who has worked in the system for at least 25 years to purchase up to five years of service credit. A school district or supervisory union may pay for air time in four equal payments as established by the State Treasurer.
· Military Service Credit: Provides the ability for a state employee or teacher to have included in the members creditable service, up to five years of military service. This credit becomes available to state employees who participate in the defined contribution system.
· Leaves of Absence: Provides that credit shall be granted to state employees for leaves of absence for professional study. Teachers have this option.
· Death in Service Benefits: Provides for benefit payments to the children of a deceased state employee who dies while in service, but before reaching the normal retirement date, and before completing twenty years of creditable service. Teachers have this benefit.
· Teachers Retirement Vesting: Reduces the vesting period for teachers retirement benefits from ten to five years.
· Teacher Return to service: Allows a retired teacher to remain a beneficiary of the retirement system unless he or she receives compensation in excess of 60 percent of the average compensation for a teacher in the system.
· Minimum COLA: Provides that the minimum cost of living adjustment for retirement allowances shall not be below one percent. This provision applies to state employees and teachers.
· Municipal Employees Retirement System: (1) Reduces the contribution rates for municipal employees for the period July 1, 2000 through June 30, 2005. (2) Allows the municipal retirement board to authorize the payment of a health care stipend in lieu of health insurance coverage. (3) Allows the municipal retirement board to determine when employers must contribute to the retirement system rather than on a quarterly basis. (4) Allows municipal employees who have a choice between defined contribution and defined benefit plans, to make the election within 90 days.
· Group E Member Participation in Defined Contribution Plan: Allows exempt state employees who are members of the Group E plan, who were not previously able to participate in the defined contribution plan because they had withdrawn from service, to participate in the defined contribution plan.
· One-Year COLA Provision: Provides for a cost of living adjustment to a state employees or teachers retirement allowance one year after retirement. Currently, these members will have their allowance based on their salaries as of the date they terminate employment, which results in a lower allowance than if their salaries were adjusted for inflation a year later.
· Employee Contribution Rates: Raises state employee Group F member contribution rates to 3.25 percent of compensation and fixes defined contribution participant contribution rates at 2.85 percent of compensation.
· Woodside Facility Employees: Extends to Woodside Facility employees the same retirement benefits as Department of Corrections employees.
· Law Enforcement New Hires: Includes in the Group C plan of the state employees retirement system, certain law enforcement personnel and state firefighters hired after July 1, 2000.
· Securities Lending: Gives the state treasurer more latitude in investing state, teachers and municipal retirement funds.
· Early Retirement Extension: Extends a previously granted retirement extension.
Effective Date: July 1, 2000