Retirement Reform FAILS to get needed votes!

AS REPORTED BY MIRS NEWS AGENCY this morning:

The Senate today failed to get the votes needed to pass a version of school employee retirement reform the House and Governor had wanted to address $45 billion in unfunded liability to the system, pushing into August the last remaining piece to the state budget.

The 16-22 defeat on SB 1040 stalls, for at least another month, $330 million in savings Gov. Rick SNYDER and lawmakers had planned to save in the upcoming Fiscal Year (FY) 2013 budget for schools.

Gov. Rick SNYDER and House Republican leadership don't want to move to a defined contribution system immediately, however, until an independent study has been conducted on the costs of the move and the effectiveness of current hybrid pension system.

Senate Republicans caucused twice on the issue, but it became apparent that there were not 20 votes for either the Jansen/Pavlov "compromise".

The Senate Majority opted to run the House version on the floor and despite some attempts to get the 20 votes needed for passage, leadership could only get 16. No Democrats came over to vote in support since they see the bill as taking more money out of the pockets of school employees.

The next step is for Senate Majority Leader Randy RICHARDVILLE (R-Monroe) and House Speaker Jase BOLGER (R-Marshall) to appoint members to a six-member conference committee. Both Richardville and Bolger said today they would name those conferees soon.

The House and Senate will return for an Aug. 15 session and Richardville said MPSERS will be on the agenda.
A Review of the Plan:

Snyder and Republican lawmakers have come to agreement on most of what MPSERS reform will look like. It would require school employees to increase their contributions 4 or 7 percent to their retirement or risk a drop in the multiplier from 1.5 to 1.25. The other option is to freeze their pension benefit and go to a DC system.

It also increases retiree health insurance premium contribution of both current and future retirees to at least 20 percent, capping the MPSERS premium share at 80 percent, unless the retiree is 65 or older by Jan. 1. In that case, he or she will be asked to pay 10 percent.

It eliminates retiree health insurance for new hires and replaces it with an employee match program or money that would go into a health reimbursement account.

It caps the amount schools will pay for the retirement system at the current rate of 24.46 percent of payroll. If these changes to MPSERS aren't finished by Oct. 1, the rate will go to 27 percent, which school administrators fear will put them in a financial bind.

Kurt WEISS, spokesman for Budget Director John NIXON, said the administration would continue to work with lawmakers to get a deal done. Nixon and the Governor's chief lobbyist, Dick POSTHUMUS, were in and out of the Senate and House chambers all day.

The Governor wants to pre-fund school employee health care. That's in SB 1040. The House wants stability to the school districts through the 24.46 percent cap freeze. That's in SB 1040.

But over in the House, Rep. Rick OLSON (R-Saline) said there was resistance to closing down the hybrid teacher retirement system because of concerns about stranded costs. He said until there's a study that looks at whether a move to that system makes sense, he has trouble supporting it.

"I am just reluctant to make that decision on incomplete and biased information," he said.

Sen. Rick JONES (R-Grand Ledge) said he continues to be a no vote until lawmakers vote to start paying 20 percent of their retirement premium like state employees and potentially school employees. Until that's done through passage of his SB 0026, he's a no.

Ten Republicans joined the entire Democratic caucus in voting against the reform to teacher retirement -- Sens. Jack BRANDENBURG (R-Harrison Twp.), Pat COLBECK (R-Canton), Joe HUNE (R-Fowlerville), Jansen, Jones, Arlan MEEKHOF (R-Olive Twp.), Mike NOFS (R-Battle Creek), John PAPPAGEORGE (R-Troy), Pavlov and John PROOS (R-St. Joseph).

WRITE YOUR SENATOR TODAY!!!!!

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

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.

CLICK HERE FOR AN EASY-TO-USE SOURCE FOR YOUR SENATOR’S EMAIL OR PHONE NUMBER. CLICK HERE

Petition Signatures Submitted!

MIRS BREAKING NEWS
--as reported by Michigan Independent Research Service

Collective Bargaining Signatures Submitted -- 2:01 PM
A union-backed effort to lock collective bargaining rights for public and private employees into the state constitution is one step closer to being on the Nov. ballot. Organizers today turned in around 684,000 signatures, more than twice the 322,000 valid signatures needed.

The Protect Our Jobs Coalition turned in more than 130 boxes to the Secretary of State just moments ago.

The group used a combination of union volunteers and paid circulators to gather more signatures than any other prior constitutional amendment proposal in recent history, essentially guaranteeing a place on the ballot outside of successful legal challenge.

The ballot proposal kills any future talk of a Right to Work proposal and rolls back any limitation on collective bargaining that the Republican-led legislature passed for Gov. Rick SNYDER's signature in the past 17 months. If passed, the proposed constitutional amendment also likely puts a stake through the heart of P.A. 4 of 2011, which allows a gubernatorial-appointed
emergency manager to alter or repeal a union contract.

MIRS reported on May 21 that Protect Our Jobs had more than enough signatures at that point to make the ballot, but were still collecting signatures in an effort to gain a statement-making number. The Michigan Education Association, in particular, and its members was active along with the UAW in collecting the signatures.

Good Job WLEA and MEA members!!!!

If this post looks familiar....it is. The same problems continue to hold true for the retirement proposals made by the House and Senate. Please read and then continue to the bottom to find suggested points you can use to write your representative! Also, there is an easy "click" connection that will take you to site to email your representative. All you have to know is where you live and the site will direct you to the correct rep.

The state is still breaking the promises they made to everyone regarding their retirement and what they would have to count on.Future school employees will not be contributing substantially to the plan, thus at some point the retirement fund will run out of money again (unless there is some gigantic gain on the stock market).We should be very cautious of 401K plans and would advise anyone who is considering that avenue to consult with their financial planner.It may work for you, or it may not.There are a few problems with it.

First, it further depletes monies being paid into the retirement fund, thus creating a future financial problem for retirees, school districts, and the school state aid fund which might be held liable for deficits in the future.

Secondly, I believe the state is setting the stage for education to be “business friendly” businesses. By thrusting retirement costs onto the employees, businesses don’t have to pay the costs of pension plans which have strict prepayment requirements.It makes education cheaper to take over.

Thirdly, the state is proposing a 4% employer contribution rate for the 401K type plans.However, they are capping the employer’s retirement fund charge at 24.46%.That is good for the districts, but if you pull out of the retirement fund to get 4% from the district, they are saving 20.46% on you!!!!You deserve more!Also, if the payment to the state exceeds 24.46%, the state will require the excess to come from the State Aid Fund, which means less money being given to the school districts.

The House is also planning to change the way they assess the districts the charge for pension and health care, which could ultimately cost the districts more depending on how many employee groups they have privatized.While this will help cover some of the retirement fund costs for school employees who have been privatized and no longer pay into the fund, it really isn’t providing much relief for the districts considering the increase in contributions members of MPSERS are making.

WRITE YOUR HOUSE REPRESENTATIVE AND TELL THEM these things.Do they really understand what they are doing?It is worth a shot to see if they listen.
Please WRITE or CALL your REPRESENTATIVE in the HOUSE.

Click on the following link for an EASY way to email your House Representative -
CLICK HERE

TALKING POINTS -Use the references above or your own!

H-1 - The House Version of the Retirement Bill

I wanted to share with you some of the information we received from our speaker at Tuesday night’s meeting at Clifford Smart. Most of this information is from the House Fiscal Agency Report. The House of Representatives is now calling the SB1040 Retirement Bill, H-1.

1) H-1 would require all School employees (except those already in the Hybrid plan- newer hires) to choose one of the following options by August 31, 2012 and would take effect October 1, 2012:

a. Those on the Basic Plan – Increase contributions to 4% to maintain the 1.5% multiplier

b. Those on the MIP Plan – Increase contributions from current level to 7% to maintain the 1.5% multiplier

c. Continue current contribution rates (Basic – 0%, MIP – around 4% depending on when you were hired) TO FREEZE CURRENT BENEFITS AT A 1.5% multiplier, but receive a 1.25% multiplier for future years of service

d. Freeze existing pension benefits and move into a defined contribution plan (401K style) and get a flat 4$ employer contribution for future service.

2) Cap FAC to $100,000

3) Increase retire health insurance premium contribution to 20% for CURRENT retirees and future retirees

4) Eliminate retiree health insurance for all those hired after July 1, 2012; replaced with a 401k or 457 plan with an employer match of up to 2% plus a lump sum deposit of $1000 or $2000 upon termination.

5) Continue the 3% employee contribution for retiree health but guarantee an employee’s individual contributions. Use the 3% contributions to prefund future retiree health benefits. Current employees can opt out and move into the 2% matching plan described above.

6) Shift paying for retiree health care benefits to a prefunding system with employee and employer contributions, as well as state funding

FROM TERESE: I will send the entire Fiscal Agency Report later today.

MY OPINION: The state is still breaking the promises they made to everyone regarding their retirement and what they would have to count on. Future school employees will not be contributing substantially to the plan, thus at some point the retirement fund will run out of money again (unless there is some gigantic gain on the stock market).

We should be very cautious of 401K plans and would advise anyone who is considering that avenue to consult with their financial planner. It may work for you, or it may not. There are a few problems with it.

First, it further depletes monies being paid into the retirement fund, thus creating a future financial problem for retirees, school districts, and the school state aid fund which might be held liable for deficits in the future.

Secondly, I believe the state is setting the stage for education to be “business friendly” businesses. By thrusting retirement costs onto the employees, businesses don’t have to pay the costs of pension plans which have strict prepayment requirements. It makes education cheaper to take over.

Thirdly, the state is proposing a 4% employer contribution rate for the 401K type plans. However, they are capping the employer’s retirement fund charge at 24.46%. That is good for the districts, but if you pull out of the retirement fund to get 4% from the district, they are saving 20.46% on you!!!! You deserve more!

Also, if the payment to the state exceeds 24.46%, the state will require the excess to come from the State Aid Fund, which means less money being given to the school districts.

The House is also planning to change the way they assess the districts the charge for pension and health care, which could ultimately cost the districts more depending on how many employee groups they have privatized. While this will help cover some of the retirement fund costs for school employees who have been privatized and no longer pay into the fund, it really isn’t providing much relief for the districts considering the increase in contributions members of MPSERS are making.

WRITE YOUR HOUSE REPRESENTATIVE AND TELL THEM these things. Do they really understand what they are doing? It is worth a shot to see if they listen.

lease WRITE or CALL your REPRESENTATIVE in the HOUSE.

Click on the following link for an EASY way to email your House Representative - CLICK HERE

TALKING POINTS -Use the references above or your own!

Retirement bill to be heard in House committee TODAY!

The latest version of SB 1040—legislation that attacks school employee retirement benefits—will be taken up TODAY by the House Appropriations Committee at 9 am this morning (MONDAY). According to sources in the House, their goal is to pass it WITH CHANGES and send it back to the Senate by FRIDAY!!!

Here are the elements of the SB 1040 passed by the Senate last week:

· New public school employees hired after July 1, 2012 sill be forced into a 401K
contribution plan, effectively stripping them of a pension.

· Current employees who are in the basic plan will be paying 5 percent to maintain the
1.5% multiplier.

· Current employees who are in the MIP plan will see their payments increase to 8 percent
(from 3.8 or 4.2) to retain the 1.5% multiplier.

· To avoid the higher costs in the future, employees can take a smaller multiplier (1.25%)
or move into a 401K plan.

· Final average compensation will be capped at $100,000 (probably more of a worry for
administrators).

· The bill puts “merit pay” back into the final average compensation figures.

· TheSenate set a new effective date to be July 31, 2012.

· They eliminated the graded premium for health care and eliminated the requirement of
being 60 years old to receive health care.

· CURRENT and FUTURE retirees will see their health insurance premiums double since SB
1040 burdens them with a 20 percent cost, an increase from the current 10
percent.

Please WRITE or CALL your REPRESENTATIVE in the HOUSE.

Click on the following link for an EASY way to email your House Representative - CLICK HERE

TALKING POINTS - USE ALL OR PICK THE ONES YOU WANT TO USE!!!!

• Tell your House representative that these laws are punitive and they break the promises made to you by the State of Michigan regarding your retirement.
• This bill does NOT solve the funding problem for MPSERS! These bills only kick the problem down the road. When future employees no longer contribute to the fund, the state will have an even larger funding problem!
  

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

• Tell your House 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.
• Students considering future careers have no reason to pick teaching - the constant attacks have made the profession unattractive. There is no hope for earning a wage that will allow them to leave comfortably or have adequate funds for their retirement and health care!
  

From MEA President Steve Cook -

We’ve just received word that the Senate Reforms, Restructuring and Reinventing
Committee will take up HB 4059 (prohibits public employer contracts that pay
union officials for conducting union business) 8:30 am tomorrow morning in rooms
402 and 403 in the Capitol located at 100 S. Capitol Avenue.4059 passed
the House in April 2011

PLEASE CALL YOUR SENATOR OR WRITE! (use home emails or cell phones, please!)

Click on the following link for an EASY way to email your Senator - CLICK HERE

Here is what to tell your senator!

HB 4059 Talking Points

· HB 4059 is another attack on unions. There are only 12 large school districts that allow for a full-time release president to take care of union business. And in most cases, the union reimburses the district for any costs.

· This is a local control issue. If the school district and the union determine that it’s helpful for the district to pay union officials to conduct union business, the issue can be negotiated at the
bargaining table.

· Many times, union business is school business. When problems arise, they can be resolved quickly during the day. The school district and the union benefits.

· In the long run, solving problems before they become more serious and sharing in decision making saves the district money. This is just good business practice.

· This legislation does nothing to create jobs. Michigan’s economy would be better served if lawmakers focused on creating the jobs it promised instead of further undermining the middle class.