Monday, July 16, 2012


The Senate and the House will have a one day session on Wednesday, July 18th.

The Senate is expected to take up the teacher retirement system reform bill that was passed by the House just prior to their last break. As reported by the MIRS NEWS SERVICE, “On the last day of session before summer break, the House passed a version of SB 1040 that kept the hybrid retirement system and prefunds health care, something backed by the Gov. Rick SNYDER administration. But the Senate, which passed legislation establishing a defined contribution system and closing MPSERS, adjourned before taking action after a controversial day ( 6/14/12).”

Today, Senator Mark Jansen (Gaines Township) is telling news sources that he has been working on a proposal that he thinks everyone would “love”. I am not sure it is something teachers would love. Unless you are a newly hired teacher (who is in the hybrid plan), we are all now part of a “defined-benefit plan” or a pension. The Senate wants to shut down MPSERS and move everyone to a “defined contribution plan”’; this is the 407 or similar savings plan that is then invested. This is a much more volatile form of retirement planning to have, as evidenced by the stock market crash in 2008 that wiped out over 50% of many people’s retirement funds.

Senate Appropriations Chair Roger KAHN (R-Saginaw) said, “.... it's important to reform MPSERS and he said his bill will be a "substantial improvement in security" for teacher pension plans. He said the savings can go to the foundation allowances for lower-funded districts, programs like physical education, smaller class sizes and recess monitors.” The state would also freeze the amount contributed by districts to the MPSERS fund to 24 % if reform is passed. However, the officials from the Waterford district have already announced on TV that they would use any dollars saved to plump up their savings accounts. This is a travesty for students and teachers.

Despite the many draw backs of either plan, the Senate’s intent to close down MPSERS is even more dangerous as it stops the funding source for the MPSERS fund. Where will the money come from to fund current retirees or even your own pension fund? Between the dramatic loss of support personnel who were paying into the fund and this future proposed closing of the MPSERS fund, our future retirements are dim.

Please note that none of these reforms is good for our retirements. It breaks promises that all of us have used to plan for our old age. It is also going to increase our contributions from our pay checks by 3 to 5% depending on the final outcome of the vote. 3% of $80,000 dollars is $2400 more per year that you will need to pay to the state. You are already paying this much into that “State Health Care Fund” that is being held in escrow. That means that if you are in a BASIC Retirement plan, you will be sending nearly $5000 from your paycheck to the state per year. It will be more for those who are in the MIP plans.

PLEASE WRITE YOUR SENATOR AND TELL THEM TO LOOK MORE CLOSELY AT APPROVING THE HOUSE’S VERSION OF SB1040. TELL THEM THIS IS THE MOST SECURE WAY TO REFORM MPSERS WITHOUT BREAKING PROMISES AND POTENTIALLY BREAKING THE ENTIRE SYSTEM. But ultimately, they should NOT BE BREAKING promises made to you for your retirement. Doing this after your start date is a huge impediment to your current livelihood and to your ability to fund your retirement.

Also tell your Senator to require districts to use money saved for children’s education and not to fatten their savings accounts.