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Dec 06, 2014

From our friends at AFT Michigan

Currently, the Michigan Senate is considering a package of bills aimed at making significant changes to the Michigan Public School Employee Retirement System. Senate Bills 722-728 would shift newly-hired public school employees into a defined contribution pension system. The bills would also eliminate future duty disability retirements and prohibit the purchase of service credits.

The proponents of the bills claim that the shift will save schools money while continuing to provide an adequate retirement plan for school employees. However, recent studies have shown that both these assertions are dubious at best. First, closing a defined benefit plan to new hires will end future contributions into that system - thereby requiring additional immediate funds to ensure that the existing unfunded accrued liability can be paid off. Second, comparisons of defined benefit to defined contribution plans have shown that the employer must make a much larger contribution into a defined contribution plan to provide the same level of benefits received from a defined benefit system.

These bills would likely end up costing the state millions in immediate required spending while diminishing future pension benefits for all newly hired public school employees.  To contact your senator, click the link below and sign in.  A list of your legislators with a pre-written message to send to them will open.  Just check the boxes of the legislators you want to contact and hit send.