MI HB5438

Establishes the "Public Employee Retirement Benefit Calculation Act" to prescribe how pension benefits are calculated for public employees.

Defines "base pay" as remuneration paid for employee service, excluding overtime, sick leave payouts, bonuses, vacation pay, lump-sum payments, fringe benefits, and compensation paid to artificially inflate final average compensation.

Requires political subdivisions providing defined benefit pension plans to calculate pension benefits using only base pay beginning January 1, 2017, for service accrued after that date.

Exempts service accrued before January 1, 2017 from the base pay calculation requirement and allows collective bargaining agreements in effect on January 1, 2017 to continue using their existing compensation definitions until expiration or renegotiation.

Does not apply to state units as defined in the Public Employee Retirement Benefit Protection Act of 2002 or to provisions under the Home Rule City Act.