[ Previous Page]  [ Home Page ]

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. 5838

January 13, 1981

RETIREMENT AND PENSIONS:

Benefits of member of reciprocal retirement system

Application of federal Employees' Retirement Income Security Act of 1974 to public retirement systems

Where both retirement systems have elected to come under the provisions of the Reciprocal Retirement Act, a member of a county retirement system who became a state employee and a member of the State Employees' Retirement System, upon attainment of age 60, may apply for a county retirement benefit combining county and state service, but the amount of benefits from the county retirement system shall be computed solely on service performed for the county.

Such member of the State Employees' Retirement System may use service credits earned as a member of the county retirement system to qualify for early retirement benefits from the State Employees' Retirement System, but the amount of such benefits is to be determined solely on the basis of state service and subject to other requirements of the State Employees' Retirement Act.

The federal Employees' Retirement Income Security Act of 1974 does not apply to retirement plans established and maintained by the state or any public division thereof for their respective employees.

The Honorable Thomas Guastello

State Senator

The Capitol

Lansing, Michigan

By correspondence and subsequent contact by your office, you have requested my opinion as to the state and county retirement rights of Macomb County probation personnel who are or will be transferred to state classified civil service together with all other probation personnel in the circuit courts and the Recorder's Court of the City of Detroit pursuant to 1953 PA 233, Sec. 23a, as last amended by 1979 PA 89 and 210; MCLA 791.223a; MSA 38.2293(1).

Specifically, you ask:

1. May a county probation officer who becomes a state employee apply, after 14 years of service with the county, for a county retirement benefit after 25 years of combined county and state service?

2. May the person also receive a state retirement benefit at age 55?

3. Does the Federal Employee Retirement Income Security Act of 1974 prohibit the changes in the retirement rights of Macomb County probation personnel caused by 1979 PA 210?

1953 PA 233, Sec. 23a, supra, provides, in pertinent part, as follows:

'(1) Effective April 1, 1980, all probation personnel in the circuit court of this state and recorder's court of the city of Detroit shall be considered state employees for purposes of supervision and direction. County probation personnel may transfer their employment from a county probation department to state classified civil service pursuant to procedures established by the civil service commission. County probation personnel who wish to remain county employees may elect to do so pursuant to this section. Not later than 6 years after the effective date of this section, all probation employees shall be members of the state classified civil service.

'(2) Effective April 1, 1980, all new employees hired as probation personnel shall be members of the state classified service.'

Initially, it must be observed that, with the exception of employees hired on or after April 1, 1980, county probation personnel are given an option to either transfer their employment from a county probation department to the state classified civil service or to remain county employees until January 10, 1986, six years after the effective date of 1979 PA 210, supra.

Since the Macomb County Employees' Retirement System and the State Employees' Retirement System have both elected to be subject to the provisions of the Reciprocal Retirement Act, 1961 PA 88, as amended; MCLA 38.1101 et seq; MSA 4.1601 et seq, the provisions are applicable to all Macomb County probation personnel who were so employed prior to April 1, 1980 and who became employees in the state classified civil service and members of the state civil service system.

1961 PA 88, supra, Sec. 4, as last amended by 1979 PA 115, provides, in pertinent part:

'A member of the reciprocal retirement system who leaves the employ of a reciprocal unit, designated as the preceding reciprocal unit, and enters the employ of another governmental unit, designated as the succeeding governmental unit, shall be entitled to a retirement allowance payable by the preceding reciprocal unit's retirement system subject to the following conditions:

'(b) The member does not withdraw his or her accumulated deposits from the preceding reciprocal unit's retirement system, or having withdrawn the accumulated deposits, deposits with the preceding reciprocal unit the amount withdrawn together with interest compounded annually at the rate in effect for the preceding reciprocal unit; the deposit to be made before July 1, 1980 or 5 years after the date the member becomes employed by the succeeding governmental unit.

'(d) The member's credited service in force with the preceding reciprocal retirement systems plus the member's credited service acquired in the employ of succeeding governmental units equals or exceeds the minimum credited service required for age and service retirement in the applicable preceding reciprocal retirement system.

'(e) The retirement allowance payable by any preceding reciprocal retirement system shall be determined, at the time the member ceased to be a member of the preceding reciprocal retirement system, upon the basis of the retirement allowance formula of the preceding reciprocal retirement system, the member's credited service in force in the preceding reciprocal retirement system, and the member's final average salary at that time.

'(f) Payment of a retirement allowance by a preceding reciprocal retirement system shall begin the first day of the second calendar month next following the month proper written application is filed with the governing body of the preceding reciprocal retirement system on or after attainment of age 60 years. The retirement allowance shall not begin before attainment of the minimum age for age and service retirement required in the preceding reciprocal retirement system.' (Emphasis added.)

Applying the plain terms of 1961 PA 88, Sec. 4, supra, to your first question and assuming that the person in question has become a state employee and a member of the state classified civil service system, and assuming that the member of the Macomb County Employees' Retirement System has not withdrawn his or her accumulated contributions in the county retirement system, the employee may tack on 11 years of state service when it is earned to qualify for a retirement pension from the Macomb County Employees' Retirement System. However, the retirement allowance to be paid to that person will be computed only upon the 14 years of county service and no retirement allowance may be paid before the person attains the age of 60 years, even though the Macomb County Employees' Retirement System contains provision allowing retirement benefits to be paid members of that system at the age of 55. The power of the Legislature to condition the benefits of a reciprocal retirement system upon attainment of a minimum age may not be questioned.

It is my opinion, therefore, in answer to your first question, that a Macomb County probation officer who became a state employee after 14 years of service with the county may apply for a county retirement benefit from the Macomb County Employees' Retirement System after 25 years combined county and state service, but the retirement benefit may not be paid until the person reaches the age of 60 years and the retirement benefit will be computed solely upon 14 years of county service.

In your second question you ask whether the person may also qualify for a retirement benefit from the State Employees' Retirement System upon the attainment of age 55. 1943 PA 240; MCLA 38.1 et seq; MSA 3.981(1) et seq, provides for a retirement system for state employees. In 1943 PA 240, supra, Sec. 19, the Legislature has provided that a member of the State Employees' Retirement System who has acquired at least 15 years of credited state service may retire at the age of 55 with a retirement allowance reduced by 0.5 percent of the retirement allowance multiplied by the number of months and fractions of a month, the retirant's age at retirement is under 60 years, unless the retirant has acquired 30 years or more of credited service.

It is necessary to read 1943 PA 240, Sec. 19, supra, together with 1961 PA 88, supra, Sec. 5, since your question relates to a person who is both a member of a preceding reciprocal retirement system and a succeeding reciprocal retirement system. When these sections are read together, the member of the State Employees' Retirement System who has 5 or more years of credited service acquired as a member of that system and who attains the age of 55 years may use service credit earned from the preceding reciprocal retirement system to meet the service requirements for a retirement allowance from the State Employees' Retirement System. If total service of the person in the preceding and subsequent reciprocal retirement system totals 30 or more years of credited service, the person may receive an allowance based upon the formula employing only the amount of years earned as a member of the State Employees' Retirement System. If the total of such service is less than 30 years, the amount of retirement allowance will be reduced by 30 percent, as set forth in 1943 PA 240, Sec. 19, supra.

Applying the two statutes to the factual situation presented, the county probation employee with 14 years of service in the county may qualify for a full retirement allowance from the State Employees' Retirement System upon the attainment of the age of 55 years if the employee also had 16 years of state service. The retirement allowance would be computed only upon the 16 years of state service. Should the employee in question not have a total of combined service of 30 years, the amount of retirement allowance would be computed upon state service only would be reduced by the fraction of one-half of one percent per month for the full 5-year period, or 30 percent.

In answer to your second question, it is my opinion that Macomb County probation personnel who become state employees may retire at the age of 55 years and receive a retirement allowance computed solely upon years state service in accordance with the provisions of 1943 PA 240, Sec. 17a, supra, subject to appropriate reduction if the total credited service is less than 30 years.

Finally, in regard to your third question, the Employees' Retirement Income Security Act of 1974, 29 USC 1321(b)(2), by its provisions, does not apply to governmental plans which are defined to include a retirement plan established and maintained by a state or any political subdivision thereof for their respective employees. Thus, the changes in the retirement rights of Macomb County probation personnel attributable to 1979 PA 210, supra, are not subject to the Employees' Retirement Income Security Act, supra.

Frank J. Kelley

Attorney General


[ Previous Page]  [ Home Page ]