Definitions and Who Must File

When did Public Act 202 of 2017 take effect?

Public Act 202 of 2017, the Protecting Local Government Retirement and Benefits Act (the Act), went into effect on December 20, 2017.

Are all local governments required to report to Treasury under the Act?

No. The reporting required under the Act relates to defined benefit retirement pension health benefits of a local government. Therefore, only local governments that offer or provide such retirement benefits must report to Treasury.

Are local governments that only offer a defined contribution plan (i.e. 401k and/or 457 plan) required to file?

No. Only defined benefit retirement pension and/or defined benefit retirement health care benefits are required to report under the Act.

How is the term “local unit of government” defined under the Act?

The Act generally defines a local unit of government to mean a city, village, township, county, county road commission, metropolitan district or authority, municipal electric utility system, or a district, authority, commission, public body, or public body corporate created by one or more of these entities (e.g., a library district, housing commission, etc.).

How are retirement “systems” or “plans” defined in the Act?

The Act defines a “retirement system” to mean “a retirement system, trust, plan, or reserve fund that a local government establishes, maintains, or participates in and that, by its express terms or as a result of surrounding circumstances, provides retirement pension benefits or retirement health benefits, or both. Retirement “systems” do not include state government as that term is defined in section 2 of the public employee retirement benefit protection act, 2002 PA 100, MCL 38.1682.”

Are local governments with retirement systems or plans administered by the Municipal Employees’ Retirement System (MERS) subject to the reporting requirement of the Act?

Yes.

My entity receives a stand-alone audit and is also included as a component government of a larger government. Is my entity required to file the Retirement System Annual Report (Form 5572)?

If the entity is a discretely presented component government of the larger government, the entity’s information should not be presented with the larger government’s Form 5572 and should instead be reported separately through its own Form 5572.

Blended component governments, however, should be reported as part of the larger government.