STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6339

January 28, 1986

RETIREMENT AND PENSIONS:

State Employees--computation of retirement benefits for member on deferred retirement status

The increased retirement benefit formula in effect on the date that a member on deferred retirement status becomes eligible to receive a service retirement allowance benefit is to be utilized in computing the retirement benefits to be paid such member of the State Employees Retirement System despite the fact that such member left state service prior to the increase in the retirement benefit formula.

Richard L. Beers

Director

Bureau of Retirement Systems

Stevens T. Mason Building

Second Floor, West Wing

Lansing, MI. 48909

You have requested my opinion as to which formula should be used in determining the retirement allowance of a member on deferred retirement status of the State Employees Retirement System who left the employ of the state prior to July, 1974, but was not entitled to receive a retirement allowance until after that date when the member attained age 60.

The State Employees' Retirement Act, MCL 38.1 et seq; MSA 3.981 et seq, provides for a retirement system for state employees. MCL 38.20(4); MSA 3.981(20)(4), in pertinent part provides:

The latter reference is to MCL 38.19(1); MSA 3.981(19)(1), which permits any member who has attained or attains the age of 60 years or over and has 10 or more years of credited service to retire upon written application. The retirement benefits are calculated pursuant to the provisions of MCL 38.20(1); MSA 3.981(20)(1). Prior to July 19, 1974, MCL 38.20(1); MSA 3.981(20)(1), provided:

This subsection was amended by 1974 PA 216 as follows:

A review of the Act does not indicate that any distinction is to be made between those who went on deferred retirement status before July 1, 1974 and those who attained deferred retirement status after that date. MCL 38.20(4); MSA 3.981(20)(4) merely requires written application pursuant to MCL 38.19(1); MSA 3.981(19)(1), which states that a retirant shall receive a pension based on the provisions of MCL 38.20; MSA 3.91(20). The latter section makes no distinction based on the date of the deferred retirement status and provides that all retirants are to receive a retirement allowance predicated on credited service times 1-1/2% of their final average compensation.

A question similar to that posed by you was answered in OAG, 1975-1976, No. 4903, p 172 (October 15, 1975), with reference to amendments enacted in 1974 PA 244 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, Sec. 15b, since repealed and replaced by 1980 PA 300, MCL 38.1301 et seq; MSA 15.893(111) et seq. The opinion concluded that the new retirement benefit formulas were to be used in computing benefits for members entitled to a deferred retirement allowance despite the fact the members left service prior to enactment of amendatory 1974 PA 244. Likewise, OAG, 1979-1980, No 5644, p 584 (February 1, 1980), addressed amendments enacted in 1974 PA 215 to the retirement benefit formula used in computing retirement allowances pursuant to the statute governing the administration of the Legislative Retirement System, MCL 38.1023; MSA 2.169(23), and concluded that the increased benefit formula in effect when a member on deferred retirement status was eligible to receive a retirement benefit allowance was to be used in computing the retirement benefit allowance to be paid such member. The rationales of OAG, 1975-1976, No 4903 and OAG, 1979-1980, No 5644 support a comparable conclusion in this instance.

The clear meaning of MCL 38.20(4); MSA 3.981(20)(4) is that anyone who becomes eligible for payment of a retirement allowance after July 1, 1974, the effective date of 1974 PA 216, is entitled to the higher benefit formula. As stated in OAG, 1979-1980, No 5644, 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); Owendale--Gagetown School Dist v State Board of Education, 92 Mich App 719; 285 NW2d 435 (1979), aff'd, 413 Mich 1; 317 NW2d 529 (1982); Brandon v North-Oakland Residential Services, Inc, 110 Mich App 300; 312 NW2d 238 (1981), lv den 412 Mich 900 (1982).

It is my opinion, therefore, that the increased retirement benefits formula in MCL 38.20; MSA 3.981(20), supra, as amended by 1974 PA 216, is to be used in computing retirement allowances for members of the State Employees Retirement System who left the employment of the state prior to July 1, 1974, but who were not eligible to receive retirement benefits until on or after that date.

Frank J. Kelley

Attorney General