Monday, March 26, 2012

"Reformed" Retirement Bill - SB1040

The Michigan Senate has proposed a total revamping of the Public School Employee's Retirement plan. It is outlined in the Senate Fiscal Agency's Analysis. Click on the link below to read the agency's point by point analysis.


In very short form: This bill proposes that -

  • Basic Members pay 5% of their income to the state to insure a 1.5% multiplier to figure your retirement amount.

  • MIP Members pay a flat 8% of their income to the state to insure a 1.5% multiplier to figure your retirement amount.

  • You can choose NOT to pay these percents, but then they will use a 1.25% multiplier (The current multiplier is 1.5%)

  • The bill requires the continuation of the 3% payment toward health care.

  • The bill requires only an 80% subsidy of retiree insurance....even for those who are already retired. This will double the payment retirees have to make a fixed income.

  • The bill proposes that people not be able to get insurance until they are 60. So, all MIP members who have the provision to retire earlier, may not get insurance. For ONLY one year there will be a "phase in" for MIP members.

  • There will be a cap of $100,000 for your FAC - Final Average Compensation

  • After this year, any money put into investments, merit pay, and longevity pay can not be figures into your FAC. How many have you are contributing the MAX of $15,000 of your salary as allowed by the IRS? None of this can count toward your FAC!

These laws are said to be proposed to save the school districts money (only 3.5%) AND to rescue the retirement fund that is purportedly underfunded.

However these proposals have huge financial implications for your futures. Promises that you were made for your retirement, especially those of you in MIP, are undone by this legislation. Your ability to count even your entire salary is being thwarted by these proposals.


  • Tell your senator and representative that these laws are punitive and they break the promises made to you by the State of Michigan regarding your retirement.

  • Tell your senator and representative that charging employees from 8 to 11% of their salaries, as well as paying 20% toward your insurance, while inhibiting what can be counted toward your Final Average Compensation is punitive and serves no other purpose.

  • Tell you senator and representative that charging employees from 8 to 11 % of their salaries, as well as paying 20% toward their insurace costs, will seriously inhibity your ability to provide for your families and save your own money toward future retirement.

  • Tell your senator and representative they are punishing your families and inhibiting your ability to provide a college education to allow them to become productive adult citizens of Michigan.


Thursday, March 22, 2012

Senate Bill 1040 – Retirement Reform Introduced Today (3/22/12)

Senate Bill 1040 – Retirement Reform Introduced Today (3/22/12)
This bill was introduced today from a committee that has been "working" on this for several weeks. This information is from the AFT report sent out this afternoon.

Pension Side:
Allows current school employees not in the hybrid plan to choose one of the following going forward:

1)An increased contribution rate (to 5% or 8% - see below), to retain the current multiplier of 1.5% for future years of service in the calculation of a pension

2)Same existing contributions, but a reduced multiplier for future years of service (used to calculate their pension; from the current 1.5% of final average compensation (FAC) to 1.25% of FAC).

3)Freezing their benefits under the defined benefit system and going to defined contribution, with a 4% employer contribution to a 401K.

Those in the basic system (hired before 1990, who did not choose to go into MIP) would pay 5% of salary if they choose the increased contributions to retain the existing 1.5% multiplier.

Those who are in the MIP system (but not in the recently created hybrid system) would pay 8% of salary if they choose the increased contributions to retain existing 1.5% multiplier.

Hybrid employees (those hired after July 1, 2010) remain in the hybrid plan at current contribution levels.

Caps the salary amount this is used for calculating pension benefits for new employees at $100,000.

Prohibits some types of compensation from counting toward calculating pension amounts going forward. Those types are: Tax-sheltered annuities, longevity pay and merit pay.

Health Care Side:
The system would pay no more than 80% of the retiree health care premium for those who have a premium subsidy (current retirees and current employees hired before July 1, 2012).

Requires most current employees to be at least 60 years old before they can receive retiree health care benefits. However, there would be a phase-in period for current employees; up until June 30, 2013, those who are not yet 60 could qualify if their age and years of service add up to 85 by that date.

Retroactively applies a graded premium retiree subsidy coverage for all employees. Under current law, only employees hired since July 1, 2008, are in graded retiree health care premium coverage, but his bill retroactively applies graded premiums to all employees

Creates a 2% retiree 401k account for new employees – they would have no retirement health care premium subsidy. Employees could contribute up to 2% of their salary to the account and have up to that amount matched. Note: since employers are presently paying for current retirees’ health care on a cash basis (meaning it is not pre-funded), this is actually an additional cost to employers for the next 30 years, but after that, health care costs will begin to decline significantly.

Maintains the 3% employee contribution for health care for current employees only. (As described above, new employees would instead pay the 2% into the health reimbursement account.)


Tuesday, March 20, 2012

Prohibition of Payroll Deduction of Dues SIGNED BY the GOVERNOR

Sent on behalf of Steven B. Cook, MEA President:

You may have heard that the Governor, despite heavy criticism from members, school boards and superintendents, signed HB 4929 last Friday afternoon – it is now known as PA 53. HB 4929 prohibits the collection of union dues by school districts, usually through payroll deduction. (Will be implemented when contracts expire.)

MEA and AFT-Michigan will be filing suit in federal court as soon as possible to block implementation of this legislation until a full hearing can be held.

It’s important to note that unlike some of the statements lawmakers used in the debate over this bill, the issue here is not whether dues will necessarily be paid, but how they will be paid. This legislation does not affect agency shop contractual language, but it does remove payroll deduction by school employers as a means of collecting dues.

We continue to develop the forms and processes necessary for alternative methods to collect membership dues.

Passage of the Protect Our Jobs constitutional amendment will help put the issue of payroll deduction back at the bargaining table, where it’s been for decades.

The petition for the amendment was approved as to form by the state board of canvassers this morning and petitions are being sent to the field as quickly as they are being printed. Thank you to the countless members, leaders and staff who are already engaged in developing and implementing plans to get the necessary signatures.

Finally, for your information, we keep reading about Governor Snyder “reaching out” to the petition organizers to get us to withdraw the amendment. But the fact is, he hasn’t spoken to MEA, and the other groups in the coalition have said they haven't heard from him either.


Wednesday, March 7, 2012

Bill 4929 is passed in Senate - WRITE the Governor


From the AFT, but true for all unionized school employees!

This morning extreme Lansing politicians are retaliating against an effort launched by teachers, nurses, school suppport staff, and construction workers yesterday to amend the state constitution to protect collective bargaining rights and strengthen Michigan’s middle class.

Today the Michigan Senate retaliated by passing HB 4929, which would punish public school teachers, bus drivers, parapros, secretaries, and cafeteria workers by placing burdensome new restrictions on the collection of dues that protect employees through collective bargaining agreements. The bill would prohibit the use of payroll deduction for the collection of dues. According to the nonpartisan House Fiscal Agency, HB 4929, “would have no significant fiscal impact on school districts.” An amendment was put on the bill in committee that would allow payroll deduction if the union local reimbursed the cost to the school district; that reasonable amendment was taken out of the bill on the Senate floor.

The bill now moves to the House where it has already been passed once, but now needs to be voted on again because of a few changes.


Tell him to not sign this legislation into law!

1) The legislature should not be allowed to use
this type of "behavior" to control public employees.

2) The legislature is only piece-mealing together “right to work” legislation that will cause great strife through out our state. Our state can not afford to be involved in this kind of bi-partisan antics with such serious issues before us.

3) The legislature should not be allowed to by-pass democratic values to institute “pay backs”.

Governor Snyder’s contact site:

Governor Snyder’s phone in Lansing: 517-335-7858

ANTI UNION Legislation

The Michigan Senate is at it and they are moving fast! Please call your legislator and/or send an email ASAP.

The Senate Reforms, Restructuring and Reinventing Committee reported out this morning to the full Senate HOUSE BILL 4929 which was sponsored by Rep. Joe Haveman.

This bill would BAN public school districts from collecting UNION Dues for their unionized employees!

In a substitute bill a PROVISION WAS ADDED that requires audits of public school unions and that public school unions file the audits with the state. Unions already file tax statements with the Internal Revenue EVERY January, including the WLEA. Our finances are already a part of the public record. The state does not need to have additional information regarding our financial information.

In addition, the substitute appropriate $100,000 to cover the cost of data collection. THIS IS A TACTIC that prevents House Bill 4929 from being subject to a public referendum, i.e., a public vote to disallow it. In other words, they are adding a technicality to prevent your right to have a say on this legislation!

Tell your senator:

1)This is a clear attack on public school unions and their members.
2)It is harrasment.
3)Your union already files statements with the IRS every year.
4)The addition of a minimal expenditure is only meant to deny you your democratic right to a voice in government! They must not block democracy!
5)Tell them to vote NO on HB 4929

The Walled Lake area Senator is Mike Kowall:
Phone: 517-373-1758
Livingston County area senator is Joe Hune:
Phone: 517-373-2420

Tuesday, March 6, 2012

CYBER school bills coming to a vote!

Subject: ALERT - Cyber Expansion Vote THIS WEEK

The Michigan House of Representatives will be voting this week on SB 619 to lift the cap for-profit cyber charter schools.

Currently, there are two cyber schools operating under existing law in the state. The law establishing the two existing cybers also requires a report be completed after two years of operation to determine their effectiveness - that report has not been completed as the cybers are only in their second year of operation.

However, data available indicates the two schools have not been achieving a level to justify further or unlimited expansion of such schools.

Please act TODAY.


Talking Points:

  1. · SB 619 allows for-profit cyber school corporations to use public taxpayer dollars - thus, reducing the already limited PUBLIC State School Aid Fund dollars.
  2. · According to the state's website, MI School Data, the two existing cyber charter schools currently operating, fall far below the state average on almost all reported student outcomes.
  3. · Only 9% of 3rd graders at one of the cybers (MI Virtual Charter Academy) were proficient on the Michigan Merit Exam last year.
  4. · AYP - the two Michigan cyber schools did NOT make AYP and nationally, only 27 percent of for-profit charter schools made AYP last year.
  5. · Wall Street traded corporations continue to make millions of dollars delivering poor quality education to students. This is big business. Connections Academy - involved with one of the two existing cybers in Michigan - recently sold for $400 million to a British firm

Is the future of Michigan's children something to be traded and sold to benefit international shareholders?

Please CONTACT your representative TODAY and urge them to oppose SB 619.