Bill Summary – FastDemocracy

Legislative Analysis
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ALLOW RETIREES TO WORK IN COUNTY OFFICES
                                                                                   http://www.house.mi.gov/hfa
WITHOUT SUSPENDING PENSION BENEFITS
                                                                                   Analysis available at
House Bill 5203 (S-1) as passed by the Senate                                      http://www.legislature.mi.gov
Sponsor: Rep. Kelly Breen
House Committee: Local Government and Municipal Finance
Senate Committee: Local Government
Complete to 12-18-24
SUMMARY:
        House Bill 5203 would amend 1851 PA 156, an act that authorizes county boards of
        commissioners to provide retirement benefits to their employees, to allow retired county
        employees who return to work at a county office for more than 1,000 hours in a year to continue
        to receive retirement benefits.
        Generally, under the act, if a person who has retired and is receiving retirement benefits
        becomes re-employed with the same county, the retirement benefit payment is suspended for
        the period of employment. The act contains certain exceptions to this provision, including for
        employees who return to work for 1,000 hours or less in any 12-month period.
        The bill would eliminate the 1,000-hour cap to allow pension or retirement benefit payments
        to continue without change in amount or conditions if a retiree becomes employed by a county,
        including as an employee in the sheriff’s office, for any amount of time, as long as all of the
        following apply:
            • The retiree is not eligible for any benefits from the county other than those required by
                law or otherwise provided because they are a retiree.
            • The retiree is not a member of the county retirement plan during the period of
                reemployment and does not receive any additional retirement credits.
            • The retiree does not receive an increase in pension or retirement benefits because of
                the employment.
        MCL 46.12a
BRIEF DISCUSSION:
        According to committee testimony, 11 counties currently operate a retirement plan under the
        act. 1 In these counties, retired individuals cannot come back to work in the same county, so
        years of institutional knowledge are lost. The bill intends to give those retirees the same
        opportunity as individuals employed by most other counties, who can return to work after
        retirement and continue to receive pension benefits. Supporters of the bill believe that allowing
        these individuals, who have extensive experience working in public safety, to come back to
        work would help address staffing shortages in county sheriff departments.
1
 Reportedly, these counties are Bay, Berrien, Genesee, Gogebic, Jackson, Kent, Macomb, Midland, Monroe, Oakland,
St. Clair, Washtenaw, and Wayne Counties.
House Fiscal Agency                                                                                  Page 1 of 2
SENATE FLOOR ACTION:
       House Bill 5203 as introduced and passed by the House applied only to retired county
       employees who returned to work in a sheriff’s office. The S-1 substitute adopted and passed
       by the Senate amended the bill to allow all retired employees who return to work with the
       county (specifically including those who work in a county sheriff’s office) to continue to
       receive their retirement benefits, regardless of whether they work for more than 1,000 hours in
       a year.
FISCAL IMPACT:
       Generally speaking, the bill would create an incentive for employees to retire earlier than they
       might have otherwise knowing that they may return to work and earn both current
       compensation and a pension. When retirees retire earlier than anticipated under a retirement
       system’s actuarial assumptions, it increases the unfunded liabilities in a pension system.
       Increased unfunded liabilities would be borne by the county through increased costs on payroll.
       An estimate of the costs is not available at this time and would vary by county assuming the
       county chose to allow retirants to return to work. The increased unfunded liabilities would be
       directly related to the number of employees choosing to retire earlier than the system otherwise
       assumed. How this policy would affect employment and staffing in county offices is unknown.
POSITIONS:
       Representatives of the following entities testified in support of the bill (2-21-24):
          • Kent County Sheriff
          • Michigan Sheriffs’ Association
       The following entities indicated support for the bill:
          • Michigan Association of Counties (3-6-24)
          • Southeast Michigan Council of Governments (2-21-24)
                                                           Legislative Analyst: Holly Kuhn
                                                                Fiscal Analyst: Ben Gielczyk
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency                                     HB 5203 (S-1) as passed by the Senate   Page 2 of 2
Statutes affected: 
Substitute (S-1): 46.12
House Introduced Bill: 46.12
As Passed by the House: 46.12
As Passed by the Senate: 46.12