Michigan House Bill HB4659

Michigan 2025-2026 Regular Session

• Introduced: 6/17/25
• Refer: 6/17/25

Caption

Retirement: state employees; naming a special needs trust as beneficiary; allow. Amends sec. 31 of 1943 PA 240 (MCL 38.31).

Impact

The primary impact of HB4659 will be on the beneficiaries of state employees' retirement plans. By allowing special needs trusts to be named as beneficiaries, the bill ensures that funds can be properly managed and protected for beneficiaries with disabilities. This move is expected to align state law with developments in estate planning and financial management practices that recognize the unique needs of individuals with special requirements. Additionally, by updating the act, the bill may help streamline benefit distributions and reduce potential conflicts or complications that could arise in traditional beneficiary designations.

Summary

House Bill 4659 amends the 1943 PA 240 State Employees' Retirement Act to allow for the naming of a special needs trust as a beneficiary for retirement benefits. This modification aims to provide greater financial security for members and their families, especially in cases where family members with special needs may benefit from trust provisions. The bill retains the core structure of retirement allowances, offering members options that include a regular retirement allowance or a reduced allowance with a dual benefit payable to both the member and the beneficiary upon retirement.

Contention

Notable points of contention may arise from differing opinions around how this bill affects the overall management of retirement benefits by making provisions for special needs trusts. Some stakeholders may argue that this could complicate the retirement system's processes, while proponents assert that it empowers families to provide better for their dependent members with disabilities. Concerns regarding the potential for administrative burdens and unintended consequences on the funding of retirement benefits, along with discussions about protections for the main retirement account and its beneficiaries, are likely to be discussed as the bill moves through legislative consideration.