Sec. 62.
(1) For a member who elects to terminate membership in Tier 1 under section 61(1), the retirement system shall direct the state treasurer to transfer a lump sum amount from the appropriate fund created under this act to the qualified participant's account in Tier 2 on or before September 30, 1998. The retirement system shall calculate the amount to be transferred, which shall be equal to the sum of the following:
(a) The member's accumulated contributions and applicable interest, if any, from the member's savings fund as of 12 midnight May 31, 1998.
(b) For a member who is vested under section 23(1)(a) as of 12 midnight on May 31, 1998, the excess, if any, of the actuarial present value of the member's accumulated benefit obligation, over the amount specified in subdivision (a), from the member's retirement fund. Except as provided in subsection (5), for the purposes of this subsection, the present value of the member's accumulated benefit obligation is based upon the member's estimated credited service and estimated final salary as of 12 midnight on May 31, 1998. The actuarial present value shall be computed as of 12 midnight May 31, 1998 and shall be based on the following:
(i) Eight percent effective annual interest, compounded annually.
(ii) A 50% male and 50% female gender neutral blend of the mortality tables used to project retirant longevity in the most recent actuarial valuation report.
(iii) A benefit commencement age, based upon the member's estimated credited service as of 12 midnight May 31, 1998. The benefit commencement age shall be the younger of the following, but shall not be younger than the member's age as of 12 midnight May 31, 1998:
(A) Age 55.
(B) The member's age, if the member is at least 50 years old and the sum of his or her age and estimated credited service equals or exceeds 70.
(c) Interest on any amounts determined in subdivisions (a) and (b), from June 1, 1998 to the date of the transfer, based upon 8% annual interest, compounded annually.
(2) For each member who elects to terminate membership in the retirement system under section 61(1), the retirement system shall recompute the amount transferred under subsection (1) not later than November 30, 1998 based upon the member's actual credited service and actual final salary as of 12 midnight May 31, 1998. If the recomputed amount differs from the amount transferred under subsection (1) by $10.00 or more, not later than December 15, 1998, the retirement system shall do all of the following:
(a) Direct the state treasurer to transfer from the members' retirement fund to the qualified participant's account in Tier 2 the excess, if any, of the recomputed amount over the previously transferred amount together with interest from 12 midnight May 31, 1998 to the date of the transfer under this subsection, based upon 8% effective annual interest, compounded annually.
(b) Direct the state treasurer to transfer from the qualified participant's account in Tier 2 to the members' retirement fund the excess, if any, of the previously transferred amount over the recomputed amount, together with interest, from the date of the transfer made under subsection (1), based upon 8% effective annual interest, compounded annually.
(3) For a deferred vested member who elects to terminate membership in this retirement system under section 61(2), the retirement system shall direct the state treasurer to transfer a lump sum amount from the appropriate fund created under this act to the qualified participant's account in Tier 2 on or before the expiration of 60 days after the date of the individual's termination of employment. The retirement system shall calculate the amount to be transferred, which shall be equal to the sum of the following:
(a) The deferred vested member's accumulated contributions and applicable interest, if any, from the members' savings fund as of 12 midnight on the last day of the payroll period that includes the date of the election.
(b) The excess, if any, of the actuarial present value of the deferred vested member's accumulated benefit obligation, over the amount specified in subdivision (a), from the members' retirement fund. Except as provided in subsection (5), for the purposes of this subsection, the present value of the deferred vested member's accumulated benefit obligation is based upon the deferred vested member's estimated credited service and estimated final salary as of 12 midnight on the last day of the payroll period that includes the date of the election. The actuarial present value shall be computed as of 12 midnight on that date and shall be based on the following:
(i) Eight percent effective annual interest, compounded annually.
(ii) A 50% male and 50% female gender neutral blend of the mortality tables used to project retirant longevity in the most recent annual actuarial valuation report.
(iii) A benefit commencement age, based upon the member's estimated credited service as of 12 midnight on the last day of the payroll period that includes the date of the election. The benefit commencement age shall be the younger of the following, but shall not be younger than the member's age as of 12 midnight on the last day of the payroll period that includes the date of the election:
(A) Age 55.
(B) The deferred member's age, if the deferred member is at least 50 years old and the sum of his or her age and estimated credited service equals or exceeds 70.
(c) Interest on any amounts determined in subdivisions (a) and (b), from the first day of the payroll period immediately following the date of the election to the date of the transfer, based upon 8% effective annual interest, compounded annually.
(4) For each deferred vested member who elects to terminate membership in Tier 1 under section 61(2), the retirement system shall recompute the amount transferred under subsection (3) not later than the expiration of 90 days after the transfer occurs under subsection (3) based upon the deferred vested member's actual credited service and actual final salary as of 12 midnight on the last day of the payroll period that includes the date of the election. If the recomputed amount differs from the amount transferred under subsection (3) by $10.00 or more, the retirement system shall do all of the following:
(a) Direct the state treasurer to transfer from the members' retirement fund to the qualified participant's account in Tier 2 the excess, if any, of the recomputed amount over the previously transferred amount together with interest from 12 midnight on the last day of the payroll period that includes the date of the election to the date of the transfer under this subsection, based upon 8% effective annual interest, compounded annually.
(b) Direct the state treasurer to transfer from the qualified participant's account in Tier 2 to the members' retirement fund the excess, if any, of the previously transferred amount over the recomputed amount, together with interest, from the date of the transfer made under subsection (3), based upon 8% effective annual interest, compounded annually.
(5) For the purposes of subsections (1) to (4), the calculation of estimated and actual present value of the member's or deferred vested member's accumulated benefit obligation shall be based upon methods adopted by the retirement system's actuary in consultation with the retirement board. The retirement system shall utilize the same actuarial valuation report used to calculate the amount transferred under subsection (1) or (3) when making the recomputation required under subsection (2) or (4). Estimated and actual final salary shall be determined as provided in section 9 as of 12 midnight on the date the member or deferred member ceases to be a member of Tier 1 under section 61.
(6) For a former nonvested member who elects to terminate membership in Tier 1 under section 61(2) and who has accumulated contributions standing to his or her credit in the members' savings fund, the retirement system shall direct the state treasurer to transfer a lump sum amount from the members' savings fund to the qualified participant's account in Tier 2 on or before the expiration of 60 days after the date of the individual's election to terminate membership. The retirement system shall calculate the amount to be transferred, which shall be equal to the sum of the following:
(a) The former nonvested member's accumulated contributions and applicable interest, if any, from the members' savings fund as of 12 midnight on the last day of the payroll period that includes the date of the election.
(b) Interest on any amounts determined in subdivision (a), from the first day of the payroll period immediately following the date of the election to the date of the transfer, based upon 8% effective annual interest, compounded annually.
(7) If the board receives notification from the United States internal revenue service that this section or any portion of this section will cause the retirement system to be disqualified for tax purposes under the internal revenue code, then the portion that will cause the disqualification does not apply.
History: Add. 1996, Act 486, Eff. Mar. 31, 1997 ;-- Am. 1998, Act 305, Imd. Eff. July 28, 1998 ;-- Am. 2002, Act 97, Imd. Eff. Mar. 27, 2002 Compiler's Notes: Section 2 of Act 486 of 1996 provides:“Section 2. If any section or part of a section of this act is for any reason held to be invalid or unconstitutional, the holding does not affect the validity of the remaining sections of this act or the act in its entirety.
Structure Michigan Compiled Laws
Chapter 38 - Civil Service and Retirement
Act 261 of 1957 - Michigan Legislative Retirement System Act (38.1001 - 38.1080)
Section 38.1001 - Retirement System; Creation.
Section 38.1002 - Michigan Legislative Retirement System; Name.
Section 38.1003 - Construction of Terms.
Section 38.1004 - “Retirement System” Defined.
Section 38.1005 - Board; Definition.
Section 38.1006 - “Member” Defined.
Section 38.1007 - Repealed. 1981, Act 123, Imd. Eff. July 23, 1981.
Section 38.1007a - “Direct Rollover” and “Distributee” Defined.
Section 38.1008 - Repealed. 1981, Act 123, Imd. Eff. July 23, 1981.
Section 38.1008a - Definitions.
Section 38.1009 - “Salary” Defined.
Section 38.1010 - Repealed. 1981, Act 123, Imd. Eff. July 23, 1981.
Section 38.1012 - “Retirement Allowance” Defined.
Section 38.1013 - “Retirant” Defined.
Section 38.1013a - “Survivor,”“eligible Child,” and “Surviving Spouse” Defined.
Section 38.1014 - “Refund Beneficiary” Defined.
Section 38.1015 - Actuarial Tables; Definition.
Section 38.1016 - Prescribed Rate of Interest; Definition.
Section 38.1017 - “Fiscal Year” Defined.
Section 38.1017a - “Deferred Vested Member” Defined.
Section 38.1017b - “Leadership Position” Defined.
Section 38.1017c - “Legislator” Defined.
Section 38.1017d - “Tier 1” and “Tier 2” Defined.
Section 38.1019 - Repealed. 1981, Act 123, Imd. Eff. July 23, 1981.
Section 38.1021a - Member Contributions Picked Up by State.
Section 38.1022a - Income Fund; Creation; Purpose; Interest, Dividends, and Other Income; Expenses.
Section 38.1022b - Prorating and Allocating Annual Appropriations to Retirement System.
Section 38.1023a - Repealed. 1974, Act 215, Eff. Dec. 31, 1974.
Section 38.1023c - Increase of Retirement Allowance.
Section 38.1023d - Disabled Member; Retirement Allowance; Annual Examination.
Section 38.1024a - Remarriage of Surviving Spouse.
Section 38.1027 - First Board of Trustees; Organizational Meeting, Election of Officers.
Section 38.1028 - Vacancy in Trusteeship.
Section 38.1029 - Trustees; Compensation and Expenses.
Section 38.1030 - Board of Trustees; Quorum, Proxy.
Section 38.1031 - Board of Trustees; Powers and Duties.
Section 38.1033 - Board of Trustees; Authority as to Retirement Allowances, Suspensions and Refunds.
Section 38.1035 - Board of Trustees; Estimate of Appropriation.
Section 38.1036 - Repealed. 1987, Act 58, Imd. Eff. June 23, 1987.
Section 38.1036a - Reinstatement of Suspended Contributions.
Section 38.1037 - Repealed. 1981, Act 123, Imd. Eff. July 23, 1981.
Section 38.1039 - Board of Trustees; Appointment of Secretary and Administrative Personnel.
Section 38.1040 - Board of Trustees; Record of Proceedings; Individual Accounts; Actuarial Data.
Section 38.1041 - Board of Trustees; Audit of Accounts; Annual Statement.
Section 38.1042 - Acceptance of Gift, Grant, or Bequest by Board.
Section 38.1043 - Individual Statement.
Section 38.1044 - Rules and Bylaws.
Section 38.1045 - Secretary of Board; Powers and Duties.
Section 38.1046 - Actuary; Technical Advisor of Board, Powers and Duties.
Section 38.1047 - State Treasurer as Ex Officio Treasurer of Retirement System; Duties.
Section 38.1049 - Payroll Voucher.
Section 38.1050 - Investment and Reinvestment of Cash Assets; Nonapplicability to Tier 2.
Section 38.1053 - Vested Interest in Refunds; Payment of Member Contributions; Discharge of Claims.
Section 38.1054 - Payments as Obligations of State; Disposition of Revenues.
Section 38.1056 - Undivided Interest in Assets of System.
Section 38.1058 - Retirement System Records; Falsification, Penalty.
Section 38.1058a - Correction of Error; Adjustment of Payment.
Section 38.1059 - Payment of Benefits; Commencement.
Section 38.1060 - Short Title.
Section 38.1064 - Meanings of Words and Phrases; “Accumulated Balance” Defined.
Section 38.1065 - “Employer,”“former Qualified Participant,” and “Health Benefit Dependent” Defined.
Section 38.1066 - “Qualified Participant,”“refund Beneficiary,” and “State Treasurer” Defined.
Section 38.1070 - Tier 2; Payment of Administrative Expenses.
Section 38.1071 - Participation in Other Public Sector Retirement Benefits Plan.
Section 38.1076 - Crediting Years of Accrued Service.
Section 38.1077 - Refund Beneficiary; Nomination.
Section 38.1078 - Distribution of Accumulated Balance.
Section 38.1079 - Health Insurance Coverage; Election; Eligibility.