"The retirement legislation passed this morning by Michigan Senate and House lawmakers is an ill-conceived plan that will not deliver savings to cash-strapped school districts. The meager ‘incentive’ included in the bill will fail to entice anyone not already planning to retire to do so. In fact, it will cost school districts far more money than any estimated savings because the numbers of potential retirees who might take advantage is grossly exaggerated."
Me again: If you were planning to retire in the next year or two, the 1.6 multiplier, as well as the 1.55 multiplier for the "80" rule, is a good deal. And, if a number of people take it, it will mean more jobs for people who are not of retirement age.
However-----using myself as a demonstration ----I have 31 years in as an educator. If I work 3 more years, I will earn more at the 1.5 multiplier in 3 years than I would if I retired today with the 1.6 multiplier. I had planned to work 3 more years anyway. I will earn approximately 40% more in salary over those 3 years, so this is NOT an incentive for me.
The BAD PART???
Those of us still working will have to pay 3% of our salaries to the state. It does NOT go into an individual account for each of us.
Please read the details below from last night to find out more about the lack of a guarantee for medical benefits in retirement and the "hybrid" retirement plan for future educators.
MY POST FROM LAST NIGHT -
- This legislation has an increased multiplier for retirees - GOOD!
- This legislation has serious implications for those who do NOT retire!
- The Senate has made it clear they do not want to guarantee retiree health benefits in the future!!!
Lawmakers have apparently reached a deal on a retirement plan that would hurt thousands of school employees.
At this time, MEA members are urged to IMMEDIATELY contact their state legislators to urge them to vote NO on Senate Bill 1227. Please also tell them to vote NO on House Bill 4073, legislation that would create an insurance trust.
A vote is expected late tonight or during the night, according to legislative sources and media reports.
The "compromise" includes:
A 1.6 percent multiplier (up from the standard 1.5 percent) for those currently eligible to retire, if they retire this summer.
A 1.55 percent multiplier for those who are not currently eligible but who meet the rule of 80 -- that is, their age and years of service total 80 -- if they retire this summer.
All who do not retire will pay an extra 3 percent of salary above what they currently pay toward retirement and this money will be put in a trust set up by House Bill 4073.
House Bill 4073 will be amended to indicate that NO ONE IS GUARANTEED HEALTH BENEFITS IN RETIREMENT.
Employees hired after July 1 will be placed in an inferior "hybrid" retirement plan proposed by Gov. Jennifer Granholm.
Here's why your legislators should vote NO on the conference report for Senate Bill 1227 and on House Bill 4073:
This plan attempts to balance the school aid budget on the backs of employees. There will still be massive cuts in state aid to schools next year.
The continued erosion of the number of employees participating in the system because of outsourcing and privatization and the exclusion of charter school employees will continue to drive up the contribution rate in future years.
The proposal places future employees in a vastly inferior retirement plan and forces them to pay almost 10 percent of their salary to that plan.
All school employees will be required to pay a tax of 3 percent, which totals almost $2,600 a year for experienced teachers.
PLEASE ACT NOW! Don't wait! Your legislators need to hear from you.
Governor Jennifer Granholm
517-373-3400 Phone 517-335-6863 Fax
to write Gov. Granholm, please go to the Michigan.gov website
Speaker of the House Andy Dillon
Senate Majority Leader Mike Bishop
State Senator Nancy Cassis
State Senator Gilda Jacobs
Fax: 517-373- 2983
State Representative Vicki Barnett
State Representative Lisa Brown
State Representative Hugh Crawford
State Representative Eileen Kowall