Indications are that MPSERS Closure a Top Priority

Apr 30, 2017

We have been hearing that Senate Majority Leader Arlan Meekhof has declared that closing the Michigan Public School Employees Retirement System is his top priority this spring.  Up until today, we did not know whether the State House leaders shared this sentiment.  Now we know. 

Speaker of the House Tom Leonard has apparently communicated to his Republican caucus that they will no longer pursue a tax cut plan this spring, but instead will join with the Senate leadership to make severe cuts to public school retirement.  Ironically, because of the large up-front closing costs, closing MPSERS will require hundreds of millions of dollars to be diverted from other priorities.

Just 5 years ago, the Legislature shifted newly hired school employees into a hybrid pension plan.  This satisfied the goal of limiting risk to the state while preserving a secure benefit for school workers.  Now some legislators want to close the plan altogether and shift school workers in to a risky 401(k) style plan; the same type of plan that has proved to be disastrous for state workers. 

The 401(k) plan is more expensive than the current hybrid plan and provides a less secure benefit for workers.  The demand for the switch is coming from private investment advisors who stand to make millions in new fees if future school employees are forced into a 401(k)-style system.  Taxpayers pay more.  School employees get less.  Fund managers make millions.

Please contact your legislator and tell them to oppose this boondoggle!  The Legislature may act very soon, so please call or write today!