DEPARTMENT OF MANAGEMENT AND BUDGET

                 PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD

                            GENERAL RULES

(By authority conferred on the public school employees' retirement  board  by 
section 25(2) of 1980 Act 300, MCL 38.1325(2).


                        PART 1. GENERAL PROVISIONS


R  38.1101   Definitions.
  Rule 101. As used in these rules:
  (a) "Act" means Act No. 300 of the Public  Acts  of   1980,   as   amended, 
being S38.1301 et seq. of the Michigan Compiled Laws.
  (b) "Applicant" means a person,  member,  retirant,   or   reporting   unit 
claiming benefits under the act.
  (c) "Benefits" means any provision in the act dealing  with  maintenance of 
the member's account or the  computation  of  the  allowance  or  eligibility 
therefor, and includes any and all procedures,  policies,   and   proceedings 
applicable to such provision.
  (d) "Board" means the Michigan public school employees' retirement board as 
provided for in the act.
  (e) "Full-time student" means a  person  who  is  carrying   12   or   more 
semester  hours  or  its  equivalent  in  any    semester    or    equivalent 
instructional unit at a junior college,  community   college,   college,   or 
university.
  (f) "System" means the  Michigan  public   school   employees'   retirement 
system as provided in the act.

  History:  1985 AACS.


R  38.1102   Place of meetings.
  Rule 102. All meetings of the board, unless  otherwise   ordered   by   the 
president, shall be held in Lansing in the building where  the   offices   of 
the public school employees' retirement system are situated.

  History:  1985 AACS.


R  38.1103   Regular meetings; time.
  Rule 103. Regular meetings of the board shall be held at  such   times   as 
the needs of the board may require and subject to the   provisions   of   Act 
No. 261 of the Public Acts of 1976, as amended, being S15.267   et   seq.  of 
the Michigan Compiled Laws.

  History:  1985 AACS.


R  38.1104   Annual meeting; election of officers.
  Rule 104. The annual meeting of the board  shall  be  held   in   July.   A 
president and vice-president shall be elected at the   annual   meeting   and 
shall  take  office  immediately  upon  election  and   serve   until   their 
successors are elected.

  History:  1985 AACS.


R  38.1105   Special meetings.
  Rule 105. Special meetings  of  the  board  may  be  held   at   any   time 
consistent with Act No. 267 of the Public Acts of 1976,  as  amended,   being 
S15.261 et seq. of the Michigan Compiled Laws, on call of the president or on 
written request to the secretary by the  majority  of  the  members  of   the 
board. Unless by unanimous consent, a special meeting shall   not   be   held 
without 3 days' written notice to each member of the board.

  History:  1985 AACS.


R  38.1106   Quorum.
  Rule 106. (1) A majority of the board shall constitute a  quorum  for   the 
transaction of business at a meeting of the board.
  (2) When only 5 members of the board are present for a  meeting,  not  less 
than 4 concurring votes shall be necessary for a decision.

  History:  1985 AACS.


R  38.1107   Order of business.
  Rule 107. The order of business at all  regular  meetings   shall   be   as 
follows:
  (a) Roll call.
  (b) Approval of minutes.
  (c) Public comment.
  (d) Consideration of financial report.
  (e) Action on allowance applications.
  (f) Unfinished business.
  (g) New business.
  (h) Special reports.
  (i) Public comment.
  (j) Adjournment.

  History:  1985 AACS.


R  38.1108   Declaratory rulings.
  Rule 108. (1) A person requesting a declaratory ruling   from   the   board 
regarding a statute, rule,  or  order  administered  by   the   board   shall 
submit, in duplicate, a sworn petition to the board setting  forth   all   of 
the following information:
  (a) The nature and purpose for the request.
  (b) The statute, rule, or order administered by the board  to   which   the 
request applies.
  (c) The person's involvement, interest, or relationship  to  that  statute, 
rule, or order.
  (d) The exact subject of the ruling required.
  (2) Requests for more than 1 declaratory ruling regarding   the   same   or 
different statute, rule, or order shall be submitted separately.
  (3) When the board proposes  to  make  a  declaratory   ruling,   it   will 
provide public notice and schedule a time for consideration  at  a  regularly 
scheduled meeting of the board. The board shall provide  public   notice   of 
declaratory rulings.

  History:  1985 AACS.


R  38.1109   Consideration and disposition of declaratory ruling requests.
  Rule 109. Within 90 days after receipt of  a  complete   petition   for   a 
declaratory ruling, the board,  after  consultation,   if   necessary,   with 
staff and the attorney general will act on  the   petition.   A   declaratory 
ruling shall receive a majority concurrence of the  board   members   present 
and voting before it is issued to the interested person.

  History:  1985 AACS.


R  38.1110   Reporting unit; employee reports.
  Rule 110. In reporting service credit for all  employees,   the   reporting 
unit shall include the hours worked along with such  other  information,   as 
determined  by  the  retirement  system,  as  is   necessary   to   determine 
eligibility for, and the amount of, retirement benefits. The reports shall be 
submitted in accordance with  the  schedules  published   in   the   Michigan 
public school employees' retirement system instruction manual.

  History:  1985 AACS.


R  38.1111   Delinquent member or employer contribution.
  Rule 111. (1) A member shall not be entitled to  a   retirement   allowance 
based  upon  creditable  reporting  unit  service   performed    under    the 
contributory plan until the  member  has  contributed   to   the   retirement 
system an amount equal to the amount the member   should   have   contributed 
according to the schedule governing contributions in effect   at   the   time 
the creditable service was performed, together with interest at such  rate as 
the retirement board shall determine. If  a  member  who  made  payment   for 
service performed under this rule dies or withdraws   from   service   before 
the member's retirement allowance becomes effective and there  is  no   other 
person entitled to an  allowance,  the  payment  shall   be   refunded   upon 
request  to  the  member,  refund  beneficiary,  or,  if   none,   a    legal 
representative appointed by the court.
  (2)  Delinquent  contributions   for   service    performed    under    the 
noncontributory plan shall be the responsibility  of   the   reporting   unit 
where the service was performed and subject to penalties  and   interest   as 
determined by the retirement board and statute.

  History:  1985 AACS.


R  38.1112   Board-determined rate of interest.
  Rule 112. The rate of interest for purposes of repayment   of   a   refund, 
purchase of out-of-system public education service   and   other   creditable 
service, and crediting individual member accounts shall be at  such  rate  as 
the retirement board from time to time determines. For  these  purposes,  the 
board may determine a rate of  interest,  hereafter  referred   to   as   the 
"board-determined rate of interest (BDRI)," which  shall   not   exceed   the 
assumed actuarial rate of return.

  History:  1985 AACS.


R  38.1113   Granting of service credit.
  Rule 113. The board shall grant a year of service credit  to   any   member 
who has been employed during the school fiscal year from July 1  to  June  30 
for 170 days of not less than 6 hours per day. A maximum of  30   hours   per 
week shall be accrued. The board may allow a year of service  credit  if  the 
member was employed for a minimum of 150 days when it is needed to qualify  a 
member or beneficiary for a monthly  allowance   in   the   final   year   of 
service. This minimum may also be used when the  employing  school   agency's 
full-time employee's term of employment is less than 170 days.

  History:  1985 AACS.


R  38.1114   Fractional year of service.
  Rule 114. Where a member serves less than a  school   fiscal   year,   such 
time shall be credited as a fractional part of a school fiscal  year  in  the 
proportion which the number of days actually served bears to  the  number  of 
days that constitutes full-time service credit.

  History:  1985 AACS.


R  38.1115   Part-time employees; service credit.
  Rule 115. Part-time employees shall receive service  credit  for  full-time 
service on the basis of 30 or more hours per week  and  proportionate  credit 
for less than 30 hours on the basis of 30 hours for   full-time   credit   in 
the proportion which the hours employed in the school fiscal  year  bear   to 
1,020 hours.

  History:  1985 AACS.


R  38.1116   Hours of employment for  part-time  instructors  employed  at
  institutions of higher education; service credit.
  Rule 116. Where a member is employed on less than a  full-time   basis   to 
teach at an institution of higher  education,  the   reporting   unit   shall 
report hours worked to the retirement system in the   proportion   that   the 
member's class hours of credit taught bear to the class   hours   of   credit 
taught that is required for similarly assigned   full-time   instructors   at 
that reporting unit. This procedure shall be applicable whether  or  not  the 
instructor is paid on the basis of credit or semester hours taught  or  on  a 
per class basis.

  History:  1985 AACS.


R  38.1117   Credit for excluded employment.
  Rule 117. Service credit shall not be given except as  authorized  by   the 
act for reporting unit employment which  was   specifically   excluded   from 
membership by statute or administrative directive, which  includes,  but   is 
not limited to, all of the following:
  (a) A retirant of the retirement system.
  (b) A student in a reporting unit.
  (c) An enrollee in a neighborhood youth corps program  which  is   operated 
with funds from the office of economic opportunity or a person enrolled in  a 
comparable youth  training  program   designed   to   prevent   high   school 
dropouts and rehabilitate high school dropouts which  is   operated   by   an 
intermediate  school  district,  except  for  such   employment   which    is 
creditable as provided by the act.
  (d) An independent contractor.
  (e) An enrollee in a national youth administration program.
  (f) A member of the optional retirement program provided by Act  No. 156 of 
the Public Acts of 1967, as amended,   being   S38.381   et   seq.   of   the 
Michigan Compiled Laws.
  (g) A student  teacher  or  similar  training   experience   required   for 
certification  or  degree  purposes,  unless  that   person   also   received 
compensation  which  was  reasonably  commensurate   with    the    beginning 
compensation paid to a person already trained for the   same   position.   In 
that event, the member shall be subject to the  payment   and   certification 
provisions provided by R 38.1111 and R 38.1119, respectively.
  (h) A person employed under Act No. 69 of the Public Acts  of  1983,  being 
S409.221 et seq. of the Michigan Compiled Laws, and known  as  the   Michigan 
Youth Corps Act.
  (i) A person engaged in some other type of  employment   not   specifically 
included by statute or administrative directive.

  History:  1985 AACS.


R  38.1118   Student employment during vacation periods;  service  credit.
  Rule 118. Service credit shall be granted for  public   school   employment 
rendered during the extended vacation  period  in  which   the   person   was 
enrolled but not attending classes within the same school   system   if   the 
employment is not excluded as provided in R 38.1117.

  History:  1985 AACS.


R  38.1119   Proof of payment; documentation requirements; payment.
  Rule 119. (1) A member who requests service  credit   for   public   school 
employment which is provided for in R 38.1117,  R 38.1118,   or   any   other 
creditable  reporting  unit  service,  which  was  not   reported   to    the 
retirement system shall submit at least  1  of  the   following   proofs   of 
service:
  (a) An affidavit completed by the present school  officer  which  certifies 
the employment on the basis of official payroll records on  file   with   the 
reporting unit.
  (b) If there are no official payroll records available,  a   member   shall 
submit a missing record affidavit and either of the   following   proofs   of 
service:
  (i) Three citizens' corroborative affidavits and either a W-2  statement or 
an income tax return.
  (ii) Other official school-produced records for the  year   or   years   in 
question.
  (2) One of the 3 corroborative affidavits shall be completed  by  a  person 
whose employment with the  same  reporting  unit  can   be   certified   from 
official  records  and  whose  position  would   have   afforded   day-to-day 
knowledge of the member's employment.
  (3) The retirement board may permit other proofs of service in  addition to 
those described in subrule (1) of this rule.
  (4) The missing record affidavit shall  be  a  form   prescribed   by   the 
retirement board for use by present school  officers   in   those   instances 
where official school records are not available from which to  certify  to  a 
person's employment. The form shall require a statement as  to  why   records 
are not available.
  (5) A citizen's corroborative affidavit shall be a   form   prescribed   by 
the retirement board for corroborating a person's  public  school  employment 
and shall contain a notarized statement as to why the person is  qualified to 
attest to the employment being certified.  The  form  shall  also  state  the 
penalty for providing misinformation with intent to deceive.
  (6) The  school  officer's  corroborative  affidavit  shall   be   a   form 
prescribed by the retirement board for use by the present  school  officer in 
those instances where official school records are available  from   which  to 
certify to a person's employment.  The  form  shall   require   a   statement 
identifying the records used for completing the form.

  History:  1985 AACS.


R  38.1120   Out-of-system public education and other creditable  service;
  certification; payment procedure.
  Rule 120. (1) An active member may, after satisfying  the  requirements  of 
the act, purchase out-of-system  public  education   and   other   creditable 
service. The board shall allow credit for  out-of-system   public   education 
service if  similar  service  performed  in  a  reporting   unit   would   be 
creditable. Such service shall not be creditable until   the   member   makes 
payment in full. Partial payments for  service  performed   before   July  1, 
1974, will be accepted up to the time of the final payment,  which  shall  be 
not later than the effective date of the  member's  retirement  allowance.
The minimum partial payment shall be established by the board.
  (2) The procedure for computing the compensation  base  for   out-of-system 
public education and other creditable service  which   is   performed   after 
July 1, 1974,  and  payment  procedure  shall  be  the  same   as   for   the 
purchasing of nonintervening military service credit.
  (3) It shall be the responsibility of the member to   furnish,   on   forms 
provided  by  the   retirement   office,    certification    of    creditable 
out-of-system  public  education  and  other    creditable    service.    The 
certification shall be completed from official records in  the  possession of 
the educational agency, a  public  retirement  system,  or   a   governmental 
agency.
  (4)  It  shall  be  the  member's  responsibility   to   obtain   completed 
certification of service, on forms prescribed by the  retirement  board,   of 
the  member's  creditable  out-of-system  public    education    and    other 
creditable service.
  (5) An original copy of the certification of service  is  required,   which 
shall also include a list of the salaries received each school fiscal year of 
the member's service. It shall also  contain  a  statement  by   the   school 
officer completing the certification that his or her  statements  are   based 
upon official school records on file.
  (6) If the support documents do  not  establish   valid   service   credit, 
evaluation shall be based on annual composite summary listings.

  History:  1985 AACS.


R  38.1121   Nonintervening military service credit; payment procedure.
  Rule 121. To be processed, an application   for   nonintervening   military 
service credit shall be received in the retirement office  before  June 15 of 
the school fiscal year upon which payment  is  to  be   based.   A   military 
payment received which is postmarked after the last  date   of   the   school 
fiscal year upon which the payment is to be based will be  returned  to   the 
member. If the June 30 deadline is not met, the member shall reapply.

  History:  1985 AACS.


R  38.1122   Eligibility to purchase other creditable service or  repay  a
  refund.
  Rule 122. The purchase of any service creditable  by   statute,   excluding 
repayment of a refund, shall be made while an individual is   a   member   of 
the retirement system, except that payment by a disability applicant shall be 
permitted if full payment is made  before   the   effective   date   of   the 
allowance.

  History:  1985 AACS.


R  38.1123   Evaluation of service credit; insufficient documentation.
  Rule 123. If support  documents  are  insufficient   to   establish   valid 
service credit, evaluation shall be based on   composite   summary   listings 
compiled and maintained by the retirement system.

  History:  1985 AACS.


R  38.1124   Repayment of refunds.
  Rule 124. A member, after satisfying the  requirements   for   repaying   a 
refund, may make  payment  in  full  or  may  elect   to   make   installment 
payments. The minimum installment payment  shall  be   established   by   the 
board.

  History:  1985 AACS.


R  38.1125   Refunds; probate court orders.
  Rule 125. A written order by the judge  of  probate  of   the   county   of 
residence instructing the  retirement  board  to  make  a   refund   to   the 
administrator or executor of the estate of  a  deceased   member   or   other 
qualified person designated by such judge of probate may   be   accepted   in 
place of  the  written  nomination  of  beneficiary  if   a   valid   written 
nomination of beneficiary is not on file with the system.

  History:  1985 AACS.


R  38.1126   Application for retirement; cancellation.
  Rule 126.  (1)  Application  for  retirement  shall  be   made   on   forms 
furnished by the retirement board and shall be filed with  the  secretary  of 
the retirement board. A letter of inquiry relative to retirement  is  not  an 
application for retirement.
  (2) A completed retirement application may be cancelled by the applicant if 
the retirement system has not processed the initial monthly payment.

  History:  1985 AACS.


R  38.1127   Final average compensation.
  Rule 127. (1) Compensation means the remuneration received by a  member, as 
defined in the  act,  and  includes   items   of   an   economic   value   as 
specifically  fixed  by  the  retirement  board.  Only  if   the   kind    of 
remuneration  or  item  of  economic  value  received  by   a    member    is 
specifically authorized  by  either  the  retirement  statute   or   by   the 
retirement board shall it be included  in  computing   the   member's   final 
average compensation.
  (2)  All  payments  to  a  member,  or  made  on   the   member's   behalf, 
recognizable as compensation which were  made   under   the   noncontributory 
plan, but which were not reported to the retirement system at  the  time  the 
payment was made, shall be verified from official  reporting   unit   records 
and certified by the president and secretary of the board  of  control.   The 
respective contribution shall be the responsibility of  the  reporting   unit 
and is subject to penalties and interest as determined  by   the   retirement 
board and statute.

  History:  1985 AACS.


R  38.1128   Post-retirement employment.
  Rule 128. A retirant may, after 1 month immediately following  his  or  her 
retirement allowance effective date, become employed in a  reporting  unit or 
with the state of Michigan in  a  position  which  is  covered  by   Act  No. 
240 of the Public Acts of 1943, as  amended,  being  S38.1  et  seq.  of  the 
Michigan Compiled Laws, and earn as much as is permitted by the act.

  History:  1985 AACS.


R  38.1129   Suspension  of   retirement   allowance;   health   insurance
  coverage.
  Rule 129. (1) If a retirement allowance  is  suspended   for   any   reason 
provided by statute, and if the  person  is  enrolled   in   the   retirement 
system's health insurance plan, the retirement system's  subsidy  shall  also 
cease until the date the retirant again  becomes  eligible   to   receive   a 
monthly allowance. During the period of suspension, the  retirant  shall   be 
given the option to continue with the health insurance  plan,   but   without 
retirement system subsidy, if applicable.
  (2)  Instead  of  suspending  a  retirement    allowance    where    excess 
post-retirement earnings are involved, the retirant may  pay  the  retirement 
system, in a single lump sum, the total amount of the  excess  earnings,   in 
which case the retirement allowance and health insurance subsidy shall not be 
discontinued. As an alternative, the retirant may choose to have his  or  her 
monthly allowance reduced over a period of not more than  12  months   by  an 
amount which will repay the system the excess earnings so received,   if  the 
reduced allowance is not less  than  50%  of  the  unreduced  allowance.  The 
retirement system's subsidy for the cost  of  the   health   insurance   plan 
shall be continued during the period of reduced allowance payments.

  History:  1985 AACS.


R  38.1130   Proof of dependency.
  Rule 130. When the act requires that a person be 50%  or  more  financially 
dependent to be eligible  to  receive  a  retirement  benefit,   or   to   be 
designated as a potential retirement allowance beneficiary,   a   spouse   or 
unmarried child under the age of 18 shall be presumed to be   50%   or   more 
dependent. For all other persons, proof of dependency shall be based  upon  a 
formula which recognizes all sources of income, including income derived from 
assets, plus all income  received  by  the  member  or  former  member.   The 
resulting sum thereof shall be divided  by  4  to  determine   50%   of   the 
person's own  personal  support.  A  financial  statement   and   any   other 
financial  records  deemed  desirable  shall  be   required   for   verifying 
eligibility.

  History:  1985 AACS.


R  38.1131   Rescission.
  Rule 131. R 38.221 to R 38.235 and R 38.301 to R 38.308  of  the   Michigan 
Compiled Laws, appearing  on  pages  366  to  369  of   the   1979   Michigan 
Administrative Code, are rescinded.

  History:  1985 AACS.