Michigan House Bill HB5989

Michigan 2023-2024 Regular Session

• Introduced: 9/26/24
• Refer: 9/26/24
• Refer: 10/15/24
• Report Pass: 12/3/24

Caption

Retirement: other; naming a special needs trust as beneficiary; allow. Amends 2017 PA 202 (MCL 38.2801 - 38.2812) by adding sec. 4a & repeals sec. 2 of 2017 PA 202 (MCL 38.2802).

Impact

If passed, HB5989 could significantly change the landscape of retirement benefits for local government employees in Michigan. The ability to transfer retirement benefits directly to a special needs trust would simplify financial planning for families of individuals with disabilities. This provision would provide peace of mind to retirees who want to ensure their benefits assist their beneficiaries without affecting their access to necessary public assistance programs. It emphasizes the state's recognition of the importance of special needs trusts and their role in safeguarding the financial future of vulnerable populations.

Summary

House Bill 5989 aims to amend the 2017 Protecting Local Government Retirement and Benefits Act by introducing Section 4a. This section allows retirement systems to direct pension benefits to a special needs trust if the designated beneficiary is a beneficiary of such a trust under federal law. This adjustment is essential for individuals who might require financial assistance without jeopardizing their eligibility for Medicaid or other public assistance programs. The bill is particularly relevant for families with minors or incapacitated individuals who benefit from such arrangements.

Contention

While HB5989 has positive implications for beneficiaries of special needs trusts, there may still be points of contention regarding the impact of the repeal of Section 2 of the original 2017 Act. Critics might argue that altering established provisions could create uncertainties in the administration of retirement systems and how benefits are handled in different scenarios. Concerns may also arise about the adequacy of oversight in ensuring that these arrangements function as intended without contributing to potential abuse of the benefits system.