Michigan House Bill HB4660

Michigan 2025-2026 Regular Session

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

Caption

Retirement: public school employees; naming a special needs trust as beneficiary; allow. Amends sec. 85 of 1980 PA 300 (MCL 38.1385).

Impact

This legislation significantly impacts the administration of retirement benefits for public school employees in Michigan. By allowing members to designate a specific beneficiary for their retirement payments, it aims to provide flexibility and ensure that surviving spouses or beneficiaries can continue to receive financial support after the retiree's death. The changes could result in alterations to how financial institutions handle these retirement accounts, potentially simplifying processes for beneficiaries.

Summary

House Bill 4660 amends the Public School Employees Retirement Act of 1979 (1980 PA 300) to provide broader options for beneficiaries of retiring members. Specifically, the bill modifies Section 85 to clarify the election of payment options for retiring members, including those who are totally and permanently disabled. It stipulates conditions under which the retirement allowance beneficiary may be designated and also provides insight into different payment options available to retirees, highlighting choices that can affect the benefits passed on upon the retiree's death.

Contention

The bill may face contention as it modifies existing legal frameworks and procedures for designating beneficiaries, particularly concerning the rights of domestic relations orders that affect retirement benefits. Concerns may arise regarding how these new provisions interact with existing laws and whether they could inadvertently disadvantage certain beneficiaries, especially in cases involving divorce or changing marital status. Stakeholder discussions may center around ensuring that retiree benefits remain secure while addressing the diverse needs of public school employees.