Retirement: state employees; naming a special needs trust as beneficiary; allow. Amends sec. 31 of 1943 PA 240 (MCL 38.31).

This bill allows Michigan state employees to designate a special needs trust as a beneficiary for their retirement benefits, expanding the list of eligible recipients beyond immediate family members. Under the updated rules, employees can choose to receive their pension payments for life while directing a portion of those funds to a named trust after their death, with specific options for continuing 100%, 50%, or 75% of the benefit to the beneficiary. The legislation requires that any designated beneficiary must be a spouse, sibling, parent, child, or grandchild, but it now permits the inclusion of a special needs trust within these categories to support individuals with disabilities. Additionally, the bill clarifies procedures for employees who remain in service after electing this option, ensuring their chosen trust receives payments if they pass away before officially retiring.