38.2731 Short title; meanings of words and phrases. Sec. 1. (1) This act shall be known and may be cited as the “public employee retirement health care funding act”. (2) For purposes of this act, the words and phrases defined in sections 2 to 2b have the meanings ascribed to them in those sections. History: […]
38.2732 Definitions; D to H. Sec. 2. (1) “Department” means the department of technology, management, and budget. (2) “Employer contributions” means the amount transferred by an employer to a funding account or a health reimbursement account. (3) “Funding account” means an account created pursuant to section 3(6) for the deposit of funds and payment of […]
38.2732a Definitions; M to P. Sec. 2a. (1) “Mandatory contributions” means mandatory amounts contributed by a participating member, which amounts, to the extent permitted by applicable law, are treated as a salary increase that has been foregone by the participating member or a permanent reduction in a participating member’s compensation, with such amounts being contributed […]
38.2732b Definitions; R to V. Sec. 2b. (1) “Retirement act” means 1 or more of the following: (a) The state employees’ retirement act, 1943 PA 240, MCL 38.1 to 38.69. (b) The public school employees retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1437. (c) The judges retirement act of 1992, 1992 PA […]
38.2733 Irrevocable trust; authorization; creation; establishment; governing board of each retirement system as grantor; members of retirement system board as trustees; deposits; distributions; funding account; preparation of annual financial statements; establishment and maintenance of health reimbursement accounts; separate prefunding account. Sec. 3. (1) One irrevocable trust is authorized and created by this act for each […]
38.2734 Assets as irrevocable. Sec. 4. (1) Except as otherwise provided in this section and sections 8 and 17, assets contributed to the irrevocable trust are irrevocable and may not be refused, refunded, or returned to the employer or employee making the contribution. (2) To the extent permitted under state and federal law, voluntary contributions […]
38.2735 Assets; use; limitation. Sec. 5. The assets of the irrevocable trust are to be used solely to perform this essential function of state government. The trust shall only provide retirement health care benefits as provided under this act and pay fees and expenses for the administrative costs in carrying out this essential governmental function. […]
38.2736 Assets not subject to certain processes of law. Sec. 6. The assets of the irrevocable trust and the ability of a member or past member of a retirement system to receive retirement health care benefits shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of […]
38.2737 Assets; diversion for other purposes prohibited. Sec. 7. The assets of the irrevocable trust shall be used exclusively for the benefit of past members and their funding account dependents and shall not be diverted for a purpose other than the payment of retirement health care benefits and the administrative costs of providing such benefits. […]
38.2738 Remaining trust assets; dissolution; distribution; remaining health reimbursement account assets. Sec. 8. (1) Any assets remaining in the funding account after all payments for eligible retirement health care benefits have been paid and all other liabilities of the trust have been satisfied shall be distributed to this state or other employers within the applicable […]
38.2739 Written trust agreement; contents. Sec. 9. The written trust agreement for each retirement system shall contain all of the following provisions consistent with this act: (a) Recitals describing the creation and purpose of the trust. (b) Language reflecting the requirements of sections 4 through 7. (c) Sections outlining the management and operation of the […]
38.2740 Retirement health care benefits; prefunding; credit to funding account; contribution or credit to health reimbursement account. Sec. 10. (1) This state, an employer of a member within a retirement system, a member, or any other person may contribute amounts to a funding account within an applicable trust for the prefunding of retirement health care […]
38.2740a Health reimbursement account; vesting; rights. Sec. 10a. (1) A member or participating member is 100% vested in mandatory contributions and voluntary contributions made to his or her health reimbursement account, subject to permissible use of the contributions under this act. (2) A member or participating member is vested in employer contributions made to his […]
38.2741 Written plan document; terms and conditions of payments of retirement health care benefits and reimbursements of medical expenses. Sec. 11. (1) The trustees shall establish a separately written plan document that governs the terms and conditions of payments of retirement health care benefits and reimbursements of medical expenses consistent with the applicable retirement act. […]
38.2742 Severability. Sec. 12. (1) If the department receives notification from the United States internal revenue service that this act or any portion of this act will cause any retirement system to be disqualified for tax purposes under the internal revenue code, or prevent any irrevocable trust from meeting the requirements of section 115 of […]
38.2743 Trusts; validity. Sec. 13. The trusts created by this act shall not be deemed to be invalid by reason of any indefiniteness or uncertainty of the persons designated as beneficiaries in this act and agreements creating the trusts, nor shall the trusts be deemed to be invalid as violating any existing law against perpetuities […]
38.2744 Taxation of assets and income; exemption. Sec. 14. All assets and income of the trusts shall be exempt from taxation by this state or any political subdivision of this state. Except as otherwise provided in section 4(2), distributions from the trusts shall not be treated as taxable income to the past members, their health […]
38.2745 Trustee; exception from certain responsibilities; indemnification. Sec. 15. (1) A trustee shall not be any of the following: (a) Personally liable for any liability, loss, or expense suffered by the trust, unless the liability, loss, or expense arises out of or results from the willful misconduct or intentional wrongdoing of the trustee. (b) Responsible […]
38.2747 Correction of error by trustees. Sec. 17. If a change or error in any records of the trust results in a member, past member, or his or her dependent paying into or receiving from the trust more or less than the member, past member, or his or her dependent should have paid or would […]
