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HB 5988

Retirement: state police; naming a special needs trust as beneficiary; allow. Amends sec. 24 of 1986 PA 182 (MCL 38.1624).

2023-2024 Regular Session Introduced by Erin Byrnes and 2 co-sponsors

Allows the State Police retirement system to send benefits directly to qualifying special needs trusts for under-65 disabled beneficiaries, preserving Medicaid while they receive benefits.

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Bill Summary · HB 5988

HB 5988 — Special Needs Trusts as Retirement-Benefit Beneficiaries (State Police Retirement Act)

Purpose

House Bill 5988 amends section 24 of the State Police Retirement Act of 1986 (1986 PA 182; MCL 38.1624) to allow retirement allowance payments that would otherwise go to an individual beneficiary to be paid directly into certain “special needs” trusts. The change is intended to permit continued receipt of public benefits (e.g., Medicaid) for disabled beneficiaries under age 65 while still allowing them to receive retirement benefits.

Key provisions

  • Adds an express authorization in MCL 38.1624 allowing the retirement system to pay a retirement allowance to a trust if:
    • The retirement allowance beneficiary is a beneficiary of a trust established under 42 U.S.C. § 1396p(d)(4)(A) or (C) (commonly called first‑party “(d)(4)(A)” and pooled “(d)(4)(C)” special needs trusts for disabled individuals under age 65); and
    • There is a written direction to the retirement system to pay the benefit to the trust.
  • Permits the required written direction to be given:
    • By the retirant (the member) while living; or
    • After the retirant’s death, by the retirement allowance beneficiary — or by the beneficiary’s legal representative if the beneficiary is a minor or incapacitated.
  • Applies to beneficiaries designated under the retirement payment options described in subsection (4)(a)–(d) (the straight benefit or reduced-life-survivor variations).
  • The amendment updates existing statutory language in Sec. 24 but does not change benefit amounts or eligibility rules beyond permitting the payment routing to a qualified trust.

Who is affected

  • Primary: State police retirants and their designated retirement allowance beneficiaries who are disabled individuals under age 65 and beneficiaries of qualifying special needs trusts.
  • Secondary: The State Police Retirement System (administration/process for receiving written directions and paying trusts).
  • This bill is one of a package (HBs 5985–5989) proposing similar changes across other public retirement systems.

Fiscal impact

  • House Fiscal Agency analysis: no direct fiscal impact on the retirement systems.

Legal/reference note

  • The trusts referenced are those authorized by 42 U.S.C. § 1396p(d)(4)(A) (first‑party special needs trusts for under‑65 disabled individuals) and § 1396p(d)(4)(C) (pooled trusts).

Legislative status and timeline (selected)

  • Introduced: Sept. 26, 2024 (Rep. Tyrone Carter)
  • Substitute (H‑2) adopted; passed the Michigan House (as passed by House, Dec. 11, 2024) with immediate effect (Roll Call #444 — Yeas 91, Nays 18).
  • Referred: Committee on Government Operations (Dec. 18, 2024).
  • Referred to Joint Committee on Finance, Revenue and Bonding (Jan. 22, 2025).
  • Current status: Pending committee consideration in the Senate/process toward final enactment.

Support and testimony

  • Supporters listed in committee report include: State Bar of Michigan Elder Law and Disability Rights Section; Michigan Association of Public Employee Retirement Systems; Michigan Bankers Association (for related bills); Chalgian & Tripp Law Offices testified in support.

Summary prepared from the House Fiscal Agency analysis and bill text (amendment to MCL 38.1624).

Compiled from official sources — confirm details with the bill’s official record.

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