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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 5644

February 1, 1980

LEGISLATURE:

Legislative retirement system

LEGISLATIVE RETIREMENT SYSTEM:

Computation of increased retirement benefit for member leaving service before statute is effective

The increased retirement benefit formula contained in an amendment to the Legislative Retirement Act is to be used in computing retirement allowances for members of the legislative retirement system who left the Legislature prior to effective date of the amendatory act but were not eligible for retirement until after the effective date of the amendatory act.

The Honorable John Bennett

State Representative

State Capitol Building

Lansing, Michigan 48909

1957 PA 261; MCLA 38.1001 et seq, MSA 2.169(1) et seq, provides for a retirement system for members of the Legislature. You have requested my opinion as to which formula should be used in determining the retirement allowances of a member of the Legislative Retirement System who left the legislature prior to December 31, 1974 but was not retired, i.e., was not entitled to receive retirement allowances until after December 31, 1974; more specifically, your inquiry appears to be made with reference to participants in the Legislative Retirement System who left the legislature prior to December 31, 1974 but retired after that date for the reason that they had not attained the age of 55 years prior to that date.

Prior to amendment by 1974 PA 215, 1957 PA 261, supra, Sec. 23, provided that retirement allowances would be 26 percent of a member's salary at the time of separation for the first 8 years of service plus 3 percent for each of the next 8 years or fraction thereof of service. 1957 PA 261, Sec. 23, supra, as it was amended by 1974 PA 215, changed the formula used to determine retirement allowances of members retiring on or after December 31, 1974 to read as follows:

'(1) A participant whose service is terminated and who meets the following requirements shall be entitled to a retirement allowance:

(a) He has 8 years of service or has 6 years of service and has been elected, qualified, and seated 4 times for full or partial terms if a member of the house or 2 times if a member of the senate elected on or after November 8, 1966.

(b) He has attained the age of 55 years or has become permanently and totally disabled.

(c) He has filed with the board a written application for a retirement allowance in which is stated his years of service, the highest salary established during his service prior to his application and the date he desires to be retired which date shall be not more than 90 days subsequent to the execution and filing of an application.

'(2) A participant shall not be entitled to receive nor accrue a retirement allowance while he is a member. Each person receiving benefits under this act consents and agrees as a condition of receiving such benefits that benefits of any nature shall not be paid or accrued while the person is a member.

'(3) A member retiring on or after December 31, 1974, shall be entitled to an annual retirement allowance of 30% of the salary stated in his application for the first 8 years of service plus 3.75% for each of the next 8 years of service. An fraction of a year of service in excess of 8 years shall be prorated. If the retirant has less than 8 years of service but qualifies by the election method, the retirement allowance shall be that proportion of 30% that his years of service and fraction thereor bears to 8 years. Years of service listed in the application need not be consecutive but shall have been rendered prior to payment of the retirement allowance. In no case shall a retirement allowance exceed 60% of the salary covered by the application.

'(4) A member shall be considered permanently and totally disabled only if the board has received a certification by at least 2 licensed physicians appointed by the board stating that the applicant is totally disabled and that such disability is likely to be permanent.' (1)

A member of the Legislative Retirement System is defined as any member of the legislature of the State of Michigan and the presiding officer of either body thereof. 1957 PA 261, supra, Sec. 6. A participant is defined as any eligible member participating in the system. 1957 PA 261, supra, Sec. 8. Each person becoming a member of the legislature who is not already a participant or retirant is declared to be a participant beginning with the date he becomes a member unless he files a written notice of election not to participate in the system within 90 days after becoming a member. 1957 PA 261, Sec. 23 supra. From a consideration of these definitions, it appears that the term 'member,' as used in 1957 PA 261, Sec. 23(3), supra, must be interpreted to mean 'participant' in order to give effect to the intent of the legislature in enacting that provision. That this was the legislative intent is demonstrated by the 1978 amendment of that provision substituting 'participant' for 'member.' 1957 PA 261, Sec. 23(3) as last amended by 1978 PA 560, supra.

Although 1957 PA 261, supra, contains no explicit provisions authorizing deferred retirements, deferred retirements are implicity authorized by the provisions of 1975 PA 261, Secs. 13 and 23, supra, of the Act, considered together.

1957 PA 261, supra, Sec. 13, defines 'retirant' as a retired participant receiving a retirement allowance or a person who except for age is otherwise eligible to receive a retirement allowance. One of the requirements for retirement eligibility set forth in 1957 PA 261, Sec. 23, supra, is the attainment of the age of 55 years. It is thus apparent that any participant in the Legislative Retirement System who leaves the legislature prior to attaining the age of 55 years and is otherwise eligible to receive a retirement allowance, is placed on deferred retirement status by operation of law.

A question similar to the question posed by your request was answered in OAG, 1975-1976, No 4903, p 172 (October 15, 1975) with reference to amendments to the formula used in computing retirement allowances pursuant to the statutes governing the administration of the Michigan Public School Employees' Retirement System, 1945 PA 136, ch 1; MCLA 38.201 et seq; MSA 15.893(1) et seq. 1945 PA 136, Sec. 15b, as amended by 1974 PA 244, supra, in pertinent part, provides as follows:

'. . . A member whose retirement allowance effective date was on or after July 1, 1974, shall receive an annuity and pension which, when added together, shall equal but not exceed the product of his total years and fraction of a year credited service, multiplied by 1 1/2% of his final average compensation . . .' (Emphasis added.)

Prior to the amendment by 1974 PA 244, 1945 PA 136, Sec. 15b, supra, provided that the retirement benefit allowance set forth therein be equal to a pension which, when added to his annuity, would equal, but not exceed, a member's credited service multiplied by the sum of 1 percent of the first $4,200.00 of his final average compensation and 1.5 percent of his final average compensation in excess of $4,200.00. This opinion held that members of the Public School Employees' Retirement System who terminated public school employment prior to July 1, 1974 but were not entitled to a deferred retirement allowance until after July 1, 1974 should have their retirement allowance computed using the increased retirement allowance benefit formula set forth in 1945 PA 136, Sec. 15b, as amended by 1974 PA 244, supra, since the language of the amendment clearly commanded that any member whose retirement allowance effective date is on or after July 1, 1974, should have his retirement allowance computed using the increased benefit formula contained therein.

The cardinal rule of statutory construction is to ascertain and give effect to the intention of the legislature and where the language employed in the statute is plain, certain and unambiguous, a bare reading suffices and no interpretation is necessary. City of Grand Rapids v Crocker, 219 Mich 178, 182; 188 NW 221 (1922); In re Chamberlain's Estate, 298 Mich 278, 283; 299 NW 82, 86 (1941).

It should be noted that the relevant provisions of 1945 PA 136, Sec. 15b, as amended by 1974 PA 244, supra, are similar to the provisions of 1957 PA 261, Sec. 23, amended by 1974 PA 215 supra. The rational of OAG No 4903 supports a comparable conclusion.

It is, therefore, my opinion that the increased retirement benefit formula in 1957 PA 261, Sec. 23, supra, as amended by 1974 PA 215, is to be used in computing retirement allowances for members of the Legislative Retirement System who left the legislature prior to December 31, 1974, but were not eligible for retirement benefits until after December 31, 1974.

Frank J. Kelley

Attorney General

(1) Subsequently, by enactment of 1978 PA 560, the retirement formula was again revised, this revision to become effective December 31, 1978. The legal principles relevant to the question are equally applicable to the 1978 PA 560 amendment. It is to be noted, that in accordance with the holding in Hughes v Judges Retirement Board, 407 Mich 75; 282 NW2d 160 (1979), additional compensation legislatively provided in a retirement system does not apply to those who are not participants on the effective date.

 


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