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Dec 11, 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. 

We have made it easy to send an email message to your state senator.  To use this feature please click on the link at the bottom of this post.  This will cause the Member Login section of the website to open.  Directions for sending an email message follow:

To send an email message you must login using your credentials.   (User name = first letter of your first name + your last name, Password =  the last 4 digits of your social security number).  Click on the box next to your senator’s name and either modify the email message or simply click submit to send the pre-written message.