DEPARTMENT OF MANAGEMENT AND BUDGET

                     STATE EMPLOYEES' RETIREMENT BOARD

                             GENERAL RULES

(By authority conferred on the State Employees Retirement Board by section  2 
of 1943 PA 240, MCL 38.2)


R 38.1   Rescinded.

  History:  1944 ACS 37; 1954 AC; 1979 AC; 2008 AACS.


R 38.2   Rescinded.

  History:  1944 ACS 37; 1954 AC; 1979 AC; 2008 AACS.


R 38.3   Rescinded.

  History:  1944 ACS 37; 1954 AC; 1979 AC; 2008 AACS.


R 38.4   Rescinded.

  History:  1944 ACS 37; 1954 AC; 1979 AC; 2008 AACS.


R 38.5   Rescinded.

  History:  1944 ACS 37; 1954 AC; 1979 AC; 2008 AACS.


R 38.6   Rescinded.

  History:  1944 ACS 37; 1954 AC; 1979 AC; 2008 AACS.


R 38.7   Rescinded.

  History:  1944 ACS 37; 1954 AC; 1979 AC; 2008 AACS.


R 38.8   Rescinded.

  History:  1944 ACS 37; 1954 AC; 1979 AC; 2008 AACS.


R 38.11   Rescinded.

  History:  1954 ACS 77, Eff. Nov. 30, 1973; 1979 AC; 2008 AACS.


R 38.12   Rescinded.

  History:  1954 ACS 77, Eff. Nov. 30, 1973; 1979 AC; 2008 AACS.


                PART I.  DEFINITIONS - APPLICABILITY

R 38.21   Definitions.
  Rule 21.   (1) As used in these rules:
  (a)  "Act" means 1943 PA 240, MCL 38.1.
  (b)  "Administrative record" means the application  and  related  documents 
considered  by  the  staff  of  the  retirement  system   in   reaching   its 
determination.
  (c)  "APA" means 1969 PA 306, MCL 24.201.
  (d)  "Application" means a request for a benefit  provided  by  the  act.   
"Application" also includes a request to reopen a closed  application  and  a 
reapplication.
  (e)  "Board" means the retirement board as defined in MCL 38.1h(4)  of  the 
act and composed of those members set forth in MCL 38.3 of the act.  
  (f)  "Bona fide termination of employment" for purposes of  R  38.38  means 
that a member terminated employment in good faith, with honesty, and  without 
any intent to return to a position covered by the act within the  same  month 
as the individual's retirement allowance effective date.
  (g)  "Closed application" means a request by an individual  for  a  benefit 
provided by the act that was withdrawn by the individual or  otherwise  never 
decided by the retirement system or the board.
  (h)  "Dependent" or "dependents," as used in MCL 38.20d of  the  act  means 
all of the following:
  (1)  The retirant's spouse.
  (2)  Any unmarried child of the retirant  who  is  considered  a  dependent 
under section 152 of the internal revenue code.
  (i)   "Good cause," as used in MCL 38.21 and 38.24 of the  act,  means  the 
legitimate inability to file an application within 1 year  after  termination 
of the member's employment.  "Good cause" does not  include  a  person's  own 
careless neglect or inattention to the filing requirements. 
  (j)   "Medical advisor," as used in MCL 38.21 and 38.24 of the act, means a 
physician designated by the retirement system.
  (k)   "Permanent," as used in MCL 38.21 and 38.24 of the  act,  means  will 
last throughout the lifetime of the member.
  (l)   "Presiding officer" means presiding officer as defined in MCL  24.279 
and 24.280 of the APA.
  (m)   "Reasonable medical treatment" means medical treatment that does  not 
involve significant danger to life or extraordinary suffering and that has  a 
reasonable probability of significantly improving the condition caused by the 
disease or injury.
  (n)   "Reapplication" means a  request  by  an  individual  for  a  benefit 
provided by the  act  that  was  previously  decided  by  the  staff  of  the 
retirement system or the board.
  (o)   "Totally incapacitated," as used in MCL 38.21 and 38.24 of  the  act, 
means the member is unable to perform  the  duties  of  his  or  her  current 
position, or any other position reasonably related to the member's education, 
training, or experience.
  (2)   Terms defined in the act and the APA have the same meaning when  used 
in these rules.

  History: 2008 AACS.

Editor's Note: An obvious error in R 38.21 (f) was corrected at  the  request 
of the promulgating agency, pursuant to Section 56 of 1969 PA 306, as amended 
by 2000 PA 262, MCL 24.256.  The rule containing the error was  published  in 
Michigan Register, 2008 MR 8.  The memorandum requesting the  correction  was 
published in Michigan Register, 2008 MR 11.



R. 38.22   Applicability of APA.
  Rule 22.   The APA applies to contested case hearings held under the act.  

  History: 2008 AACS.


R 38.23   Applicability; construction.
  Rule 23.   (1)  These rules govern except as otherwise provided by the  act 
or the APA.  In areas not addressed by these rules or the APA, the  presiding 
officer in a contested  case  may  rely  on  appropriate  provisions  of  the 
Michigan court rules.
  (2)  The intent of these rules is to secure a just, prompt, efficient,  and 
fair determination of the issues presented. 

  History: 2008 AACS.


                          PART II.  PROCEDURAL RULES


R 38.24   Request hearing; statement of facts.
  Rule 24.   (1)  If an application is denied by the staff of the  retirement 
system and the  applicant is notified in writing that he or she has  60  days 
from the date stated in this notification to  request  a  hearing,  then  the 
request for hearing shall be filed in  writing  with  the  retirement  system 
within 60 days after the date stated in this notification.  
  (2)  A request for a hearing shall contain all of the following:
  (a)  A fair and accurate statement of the facts as  the  party  understands 
them.
  (b)  The reason or reasons supporting the party's claim.
  (c)  The reasons why the decision of the staff  of  the  retirement  system 
should be reversed.

  History: 2008 AACS.


R 38.25   Proposals for decision; exceptions.
  Rule 25.   (1)  Unless otherwise established by the  presiding  officer  or 
the board, exceptions to a proposal for decision  shall  be  filed  with  the 
State Office of Administrative Hearings and Rules within 21days after service 
of the proposal for  decision  by  the  presiding  officer,  and  replies  to 
exceptions, if any, shall be filed with the State  Office  of  Administrative 
hearings and Rules within 14 days after the service of the exceptions.
  (2)  Exceptions shall clearly and concisely recite the specific findings of 
fact and conclusions of law, or lack thereof, to which  exception  is  taken, 
along with specific references to the record that support the exception.
  (3)  Objections to a proposal for decision are waived if a party  does  not 
file exceptions to a proposal for decision within the time permitted by  this 
rule.
  (4)  A proposal for decision is not a final decision of  the  board  unless 
the board orders it.

  History: 2008 AACS.


R 38.26   Action by the board.
  Rule 26.  The board shall act on every proposal for decision  in  a  public 
meeting.  The board may do any of the following:
  (a)  Remand the matter to the presiding officer or other presiding  officer 
for further action.
  (b)  Issue a final decision approving, rejecting, or modifying the proposal 
for decision.
  (c)  Exercise any other power of the board. 

  History: 2008 AACS.


R 38.27   Clerical mistakes; correction.
  Rule  27.   Clerical  mistakes  and  errors  arising  from   omissions   or 
commissions made by the board may be corrected by the board at  any  time  on 
its own initiative or as a result of a motion filed by a party.  

  History: 2008 AACS.


R 38.28   Oral argument.
  Rule 28.  A party shall not have oral argument  before  the  board  on  any 
contested case matter submitted to the board unless  the  board  specifically 
grants a request for oral argument.

  History: 2008 AACS.


R 38.29   Refiling an application.
  Rule 29.  (1)  Except as provided in  subrule  (3)  of  this  rule,  if  an 
individual files an application that concerns a matter that has already  been 
considered and denied by the staff of the  retirement  system  and  a  timely 
request for  hearing  was  not  made,  then  the  application  shall  not  be 
considered and the individual shall be notified accordingly.
  (2)  Except as provided in subrule (4) of this rule, if an individual files 
an application that concerns a matter that has already  been  considered  and 
denied by the  board,  the  application  shall  not  be  considered  and  the 
individual shall be notified accordingly.
  (3)  If an individual's previous application for a  disability  retirement, 
as provided for in MCL 38.21 and 38.24 of the act, is denied by the staff  of 
the retirement system and the individual did not make a  timely  request  for 
hearing, then the individual may file a reapplication only if the  individual 
did not terminate his or her employment in a position covered by the act  and 
either worked after the denial and before the reapplication or was  off  work 
with the approval of his or her employer.
  (4)  If an individual's previous application for a  disability  retirement, 
as provided for in MCL 38.21 and 38.24 of the act, is denied  by  the  board, 
then the individual may only file a reapplication if the individual  did  not 
terminate his or her employment in a position covered by the act  and  either 
worked after the denial and before the reapplication or was off work with the 
approval of his or her employer.

  History: 2008 AACS.


R 38.30   Documentary evidence.
  Rule 30.  If the staff of the retirement system denies an application,  and 
the applicant timely requests a hearing, then the  staff  of  the  retirement 
system shall provide a copy of its administrative record and notification  to 
the applicant.  The applicant shall have  30  days  to  file  any  additional 
documents that he or  she  wants  the  staff  of  the  retirement  system  to 
consider. 

  History: 2008 AACS.


R 38.31   Notarized signatures.
  Rule 31.  The board shall determine whether a signature shall be  notarized 
on a form used by the retirement system. A notarized signature is presumed to 
represent the signature of the individual whose name it purports to be. 

  History: 2008 AACS.


                      PART III.  RETIREMENT/PENSION RULES


R 38.32   Medical advisor's opinion.
  Rule 32.  The opinion of an individual's treating physician  shall  not  be 
given more weight than the opinion of the medical advisor with regard  to  an 
application for a disability retirement under MCL 38.21 and 38.24 of the  act 
solely based on the relative length  of  time  these  physicians  have  spent 
examining an individual or because the medical advisor's review was based  on 
an examination of the individual's medical records. 

  History: 2008 AACS.


R 38.33   Reasonable medical treatment.
  Rule 33.  An individual shall pursue all reasonable medical  treatment  for 
the injury or disease that is the basis for his or her application  for  duty 
or non-duty disability as provided by MCL 38.21 and 38.24 of the act.  

  History: 2008 AACS.


R 38.34   Duty disability.
  Rule 34.  An application for duty disability filed under MCL 38.21  of  the 
act shall be denied if the personal injury or disease that is the  basis  for 
the application was any of the following: 
  (a)  A personal injury or illness, which existed before becoming a member.
  (b)  The aggravation of a personal injury or illness, which existed  before 
becoming a member.
  (c)  A personal injury or illness, which arose while the  applicant  was  a 
member but was not proximately caused by the member's employment.

  History: 2008 AACS.


R 38.35   Medical examination.
  Rule 35.   (1)    For  purposes  of  deciding  eligibility  for  disability 
retirement under MCL 38.21 and  38.24  of  the  act,  a  medical  examination 
conducted by 1 or more medical  advisors  means  either  a  personal  medical 
examination of the member or a review of the application and medical  records 
of the member.
  (2)  If an applicant for a disability retirement under  MCL  38.21  or  MCL 
38.24 of the  act  fails  to  submit  to  a  reasonable  medical  examination 
requested by the system, the application shall be denied.

  History: 2008 AACS.


R 38.36   Other decisions not binding.
  Rule 36.  The board is not bound by a determination of disability issued by 
any other state or federal  agency  or  private  entity  when  the  board  is 
determining whether a member is entitled to a disability retirement  provided 
by MCL 38.21 or 38.24 of the act.

  History: 2008 AACS.


R 38.37   Disability application.
  Rule 37.   (1)  An individual who  seeks  a  duty  or  non-duty  disability 
retirement allowance, as provided in MCL 38.21 and 38.24 of the act, shall do 
both of the following:
  (a)  File an application on a  form  provided  by  the  retirement  system, 
including the  names  and  addresses  of  all  the  applicant's  health  care 
providers and the date of treatment.
  (b)  Execute all necessary authorizations to  disclose  health  information 
which permits the retirement system, or its agents, to obtain and review  all 
health information that relates in any way  to  the  basis  for  the  claimed 
disability.  The health information shall include what  was  created  before, 
contemporaneously with, and subsequent to the date of the alleged  injury  or 
disease that is related to the medical condition.
  (2)  An individual shall not amend an  application  for  duty  or  non-duty 
disability retirement filed under MCL 38.21 or 38.24 of  the  act  after  the 
expiration  of  the  30-day  period  in  R  38.30,  unless   the   individual 
demonstrates that the reason for wanting to amend  the  application  was  not 
known before the expiration of the 30-day period.

  History: 2008 AACS.


R 38.38   Suspension of retirement allowance.
  Rule 38.  The retirement allowance of a retirant shall be suspended  during 
any time period that the retirant returns to work in a  position  covered  by 
the act unless the retirement allowance resulted from a bona fide termination 
of employment.  

  History: 2008 AACS.


R 38.39   Disability retirement.
  Rule 39.  (1)  To receive a disability retirement under MCL  38.21  of  the 
act, the member shall prove by a preponderance of the  evidence  that  on  or 
before the termination of his or  her  employment,  he  or  she  was  totally 
incapacitated and that such incapacity was probably permanent.
  (2)  To receive a disability retirement under MCL 38.24  of  the  act,  the 
member shall prove by a preponderance of the evidence that on or  before  the 
termination of his or her employment, he or she was totally incapacitated and 
that such incapacity was likely to be permanent.
  (3)  For purposes of MCL 38.21 and 38.24 of the act, the  board  shall  not 
retire a member if the member can perform any job for which  the  member  has 
experience, training, or education.  If the board determines that a member is 
not mentally or physically totally incapacitated for further  performance  of 
duty or that a member's total  incapacity  is  not  probably  permanent,  the 
retirement system does not have the  obligation  to  find  employment  for  a 
member.

  History: 2008 AACS.


R 38.40   Social security estimate.
  Rule 40.  If a member elects the equated payment under MCL 38.20(2) of  the 
act, the estimated social security primary insurance amount shall be based on 
an estimate of the age 65 social security benefit obtained by the member from 
the social security administration and provided by the member to the staff of 
the retirement system.  This  social  security  estimate  shall  be  used  to 
actuarially  adjust  the  retirement  allowance  to  provide   an   increased 
retirement allowance payable up to age 65 irrespective of when  the  retirant 
begins to draw social security. The retirement allowance shall be reduced  at 
age 65 by the social security estimate amount the retired member provided  at 
the time of retirement. 

  History: 2008 AACS.


R 38.41   Survivor benefit; equated pension.
  Rule 41.  For purposes of this rule, the equated pension, as  described  in 
MCL 38.20(2) of  the  act,  refers  to  the  benefit  before  and  after  the 
retirant's attainment of age 65.  If a member elects a  survivor  option,  as 
provided in MCL 38.31(1) of the act, the member's retirement allowance  shall 
be adjusted accordingly.  If  the  member  also  elects  to  receive  such  a 
retirement allowance as an equated payment under MCL  38.20(2)  of  the  act, 
then the resulting retirement allowance shall be paid  until  the  retirant's 
death.  Upon the retirant's death, the retirement allowance shall be adjusted 
to cancel the effect of electing the equated payment. 

  History: 2008 AACS.


R 38.42   Service credit toward retirement.
  Rule 42.  (1)  Under MCL 38.1i(1) of the act all  of  the  following  shall 
apply: 
  (a)  Years of service are credited in  accordance  with  the  state  fiscal 
year. 
  (b)  The maximum service credited on the payroll  end  date  of  any  state 
biweekly pay period is 80 hours. 
  (c)  The maximum service credited in a  fiscal  year  is  1.0000  which  is 
equivalent to 2,080 hours.
  (d)  A maximum of 26 biweekly pay periods of 80 hours shall be credited  in 
a fiscal year.  Proportionate service credit shall be  awarded  for  payrolls 
reported on a frequency other  than  a  biweekly  pay  period.   A  part-time 
employee earns service credit in proportion to the hours worked  within  that 
pay period.  
  (e)  Only regular hours are counted for service credit and  overtime  hours 
shall not count towards creditable service.  
  (2)  An employee whose position is designated full time  under  legislative 
council operations administrative rules and determined to be full time by the 
staff of the retirement system, but whose full time schedule totals less than 
80 hours per biweekly pay period, shall be credited with .0385 years for each 
full pay period of work.

  History: 2008 AACS.


R 38.43   Layoff; eligibility for purchase of buy-in  credit;  refund  repay; 
resuming tax deferred payment (TDP) agreement.
  Rule 43.  For up to 1 calendar year after the effective date of  a  layoff, 
the individual laid off may purchase buy-in credit, repay a  refund  and,  if 
returned to work, resume TDP payments on an existing agreement.  If a  layoff 
extends beyond a 1-year period, then the laid-off  individual  ceases  to  be 
eligible to purchase buy-in credit, repay a refund or, if returned  to  work, 
resume TDP payments on an existing agreement, unless the member  demonstrates 
a continued employer-employee relationship as determined by the staff of  the 
retirement system.

  History: 2008 AACS.


R 38.44   Ten-year service requirement.
  Rule 44.  (1)   An applicant for a  disability  allowance   provided   in   
MCL 
38.24 of the act shall meet the 10-year requirement only under either of  the 
following conditions:
  (a)  If the applicant has 10 years or more of service credit in a  position 
covered by the act.
  (b)  If the applicant has 10 years or  more  of  service  credit  when  the 
applicant's service credit as an employee in a position covered by the act is 
combined with the service credit received under MCL  38.17,  17a,  17b,  17c, 
17d, 17l or 17n of the act.
  (2)  An applicant for a disability allowance provided in MCL 38.24  of  the 
act shall not be allowed to use either of the following:
  (a)  The provisions of the reciprocal  retirement  act,  1961  PA  88,  MCL 
38.1101, to meet the 10-year requirement set forth in MCL 38.24.
  (b)  Service credit purchased by the applicant under MCL 38.17g, 17h,  17i, 
17m or 18(2) of the act to meet the 10-year requirement in MCL 38.24.

  History: 2008 AACS.


R 38.45   Eligible domestic relations order.
  Rule 45.  (1)  An  eligible  domestic  relations  order  issued  under  the 
eligible domestic relations order act,  MCL  38.1701,  shall  be  drafted  in 
conformity with applicable law and a true or certified copy  filed  with  the 
staff of the retirement system before the  effective  date  of  the  member's 
retirement.
  (2)  If the staff of the retirement system  rejects  an  eligible  domestic 
relations order as not in conformity with the applicable law, then a true  or 
certified copy of an amended eligible domestic relations order that  conforms 
with applicable law shall be filed with the staff of  the  retirement  system 
before the effective date of the member's retirement.

  History: 2008 AACS.


R 38.46   Domestic relations order.
  Rule 46.  (1)  A domestic relations order, as defined  in  MCL  38.1702(c), 
shall be drafted in conformity with applicable law and filed with  the  staff 
of the retirement system before the member's death.
  (2)  If the staff of the retirement system  rejects  a  domestic  relations 
order as not in conformity with the applicable law, then a true or  certified 
copy of an amended domestic relations order that conforms with applicable law 
shall be filed with the staff of the retirement system  before  the  member's 
death.

  History: 2008 AACS.


R 38.47   Duty; non-duty.
  Rule 47.  If a member requests a duty disability and the  member  has  more 
than 10 years of credited service, then the staff of  the  retirement  system 
shall review the application to determine if the member qualifies for  either 
a duty or non-duty disability retirement allowance.   If  the  staff  of  the 
retirement  system  denies  the  application  for  a  duty  disability,   but 
recommends approval of the application  for  non-duty  disability,  then  the 
board shall not consider the application for non-duty disability until  after 
the expiration of the 60-day notice provided in R 38.24(1).

  History: 2008 AACS.


R 38.48   Payment of retirement allowance.  
  Rule 48.  A retirement allowance provided for in MCL 38.19, 19a,  19b,  19c 
and 19d of the act shall not be paid for any period of time before  the  date 
that the application is filed with the board.

  History: 2008 AACS.


R 38.49   Retirement allowance; overpayment.
  Rule 49.  (1)  If the retirement system pays a retirant or beneficiary more 
in a retirement allowance  than  he  or  she  is  entitled  to  receive,  the 
retirement system shall do both of the following: 
  (a)  Pursuant to MCL 38.41,  immediately  correct  the  error,  notify  the 
retirant or beneficiary of the  correction  of  the  error  and  provide  the 
retirant or beneficiary with his or her correct retirement allowance. 
  (b)  Not recover any overpayment to a retirant  or  beneficiary  for  those 
payments which the retirant or beneficiary received more than 6  years  prior 
to the date of the notification to the retirant or beneficiary of  the  error 
by the retirement system except in each of the following situations when  the 
retirement system shall recover the full amount of the overpayment: 
  (i)  If the member, retirant, or beneficiary misrepresented the information 
provided to the retirement system and the retirement  system  calculated  the 
retirement allowance based upon that incorrect information. 
  (ii)  If the member, retirant, or beneficiary knew or should have known  of 
the error and did not notify the retirement system of the error so  that  the 
retirement system could correct it. 
  (iii)  If the annual retirement allowance which the retirant or beneficiary 
received was greater than the retirant's final average compensation.
  (2)   The  retirement  system  shall  recover  the  entire  amount  of  the 
overpayment received by the retirant or beneficiary  in  the  situations  set 
forth in subrule (1)(b)(i), (ii) and (iii) of this rule by  adjusting  future 
payments to the retirant or beneficiary in such a manner that  the  actuarial 
equivalent of the correct benefit is paid.  For purposes of  determining  the 
actuarial equivalent retirement allowance, the actuarially  assumed  interest 
rate shall be 8% with utilization of the 1983  group  annuity  and  mortality 
table.
  (3)  Except as provided in subrule (1)(b)  of  this  rule,  depending  upon 
which is most beneficial to  the  retirant  or  beneficiary,  the  retirement 
system shall recover the overpayment received by the retirant or  beneficiary 
during the 6 years prior to the date of the  notification  of  the  error  by 
doing either of the following: 
  (a)  Allowing the retirant or beneficiary to repay  the  overpayment  in  1 
lump sum. 
  (b)  Reducing the retirant's or beneficiary's  correct  monthly  retirement 
allowance by 1 of the following: 
  (i)  The same percentage as results from the amount of the highest  monthly 
overpayment divided by the comparable actual monthly payment until the amount 
of the overpayment is recovered. 
  (ii)  To the actuarial equivalent of the benefit calculated pursuant to MCL 
38.41.  For purposes of determining the actuarial equivalent, the actuarially 
assumed interest rate shall be 8% with utilization of the 1983 group  annuity 
and mortality table.

  History: 2008 AACS.


R 38.50   Retirement allowance; underpayment.
  Rule 50.  (1)  If the retirement system pays a retirant or beneficiary less 
in a retirement allowance than he or she is entitled  to  receive,  then  the 
retirement system shall do both of the following:
  (a)  Pursuant to MCL 38.41,  immediately  correct  the  error,  notify  the 
retirant or beneficiary of the  correction  of  the  error  and  provide  the 
retirant or beneficiary with his or her correct retirement allowance. 
  (b)  At the election of the retirant or beneficiary, pay  the  underpayment 
in a lump sum or the actuarial equivalent.
  (2)  For purposes of determining the actuarial equivalent, the  actuarially 
assumed interest rate shall be 8% with utilization of the 1983 group  annuity 
and mortality table.

  History: 2008 AACS.


                          PART IV.  DECLARATORY RULING


R 38.51   Declaratory ruling.
  Rule 51.  (1)  Any interested person may request a declaratory ruling  from 
the board as provided by MCL 24.263 of the APA. 
  (2)  A request for declaratory ruling shall consist of all of the following:
  (a)  Be in the form of a sworn statement.
  (b)  State the nature and purpose for the request.
  (c)  Contain a clear and concise statement of the  actual  state  of  facts 
upon which the ruling is requested.
  (d)  State the statute, rule, or  order  administered  by  the  board  that 
applies.
  (e)  Contain a statement establishing the relationship between  the  person 
requesting the ruling and the statute, rule, or order that applies.
  (f)  Contain the requested proposed ruling.
  (3)  An interested person who requests a declaratory ruling shall  serve  a 
copy of it upon every person referred to in the statement of  facts  included 
in the request.
  (4)  Within 90 days of receipt of a request  for  declaratory  ruling  that 
complies with this rule, the board shall respond to the request by doing 1 of 
the following:
  (a)  Issue the declaratory ruling.
  (b)  Deny the request for declaratory ruling. 
  (c)  Extend the time for doing  either  subdivision  (a)  or  (b)  of  this 
subrule by an additional 90 days.

  History: 2008 AACS.