School and State Pension Bill Activity
Updated 8/2/2010
School Bill
2010 School Retirement Final Bill
Pertinent Dates:
May 20, 2010 - Effective Date of legislation.
June 11, 2010 - Filing deadline for the enhanced multiplier.
July 1, 2010 - Each member shall contribute 3% of the member’s compensation to the appropriate funding account.
Status:
The Bill currently is law but the MEA has filed suit in court claiming it is unconstitutional and are moving that the 3% contribution imposed in the legislation be put into escrow in case the law is struck down by the courts.
State Bill
Update 8/2/2010
Letter to the Union
Good Afternoon,
I believe it’s just about time that a union which represents some state employees start talking with the legislatures and get this bill passed. This is a no brainer to me, since the Governor and Director Emerson stated when presenting the proposed budgets that since they expected approximately 9000 to take the retirement, then those FTE were NOT included. This means 9000 employees were already cut from the proposed budgets and the legislatures are cutting more. Most state employee’s salaries are paid out of permit fees, licensing fees, etc, NOT general fund monies, so therefore tax increases would not help. Also, with the present economic atmosphere tax increases are not favored at this time. The only solution is layoffs or retirement and believe me I have NEVER seen it this bad in my 42 years of service with the state government.
I just hope the other unions join with your union in ironing out a proposal that will accomplish keeping people employed and those wishing to leave may do so. Putting this off only gives us the answer which would NOT be good for this state’s economy, the union membership, those workers left behind, etc. I commend you for being responsible to your membership in trying to hammer this out! Thank you.
- SEIU Member
Update 7/27/2010
CNN Story on State Budgets
Source: money.cnn.com
States filled an $84 billion gap to balance their 2011 fiscal year budgets, which went took effect earlier this month. But they could collectively face a new $12 billion hole if Congress fails to help cover growing Medicaid costs.
Update 7/26/2010
In a meeting with Michigan House Speaker Andy Dillon last week, Executive Vice president Phil Thompson continued the SEIU message that our membership support for any changes in the state employee pension plans would have to be based on mutual benefits to both the state as well as our SEIU membership. The Speaker indicated that, in his estimation, no legislation regarding state pensions would move for “at least a month” when the Michigan Legislature really starts focusing on closing the budget deficit—estimated at almost $500 million.
There is a huge concern over the inability for Congress to approve any FMAP (Medicaid matching funds) for any of the states to date. That lack of activity has cost Michigan aver $500 million in projected revenues; money that would have greatly assisted general fund-general purpose budgets.
There are several “concepts” currently floating around the Lansing’s capitol to revise state pension plans. Thompson told the SEIU Local 517M leadership at the Leadership Board Meeting on July 22nd that a couple of the proposals would be worth continued discussion as they could benefit employees currently eligible for pensions as well as open up the possibility of early retirement for some additional state employees.
PLEASE CONTINUE TO WATCH THIS PENSION SECTION OF THE SEIU WEBSITE FOR ANY FURTHER UPDATES
Update 7/1/2010
SEIU Local 517M Executive Vice President Phil Thompson has continued to meet with leadership in both the Michigan House and Michigan Senate to outline SEIU state employee membership issues concerning any proposed legislation which would change the state employees’ retirement plans. We have told members of the Michigan legislature that our members’ top retirement priority is establishing a PERMANENT 80 & OUT PLAN for all employees still in the state’s Defined Benefit program. This would allow state employee members to be eligible for full retirement benefits as soon as their age and years of state service was 80 or greater. In addition, SEIU will steadfastly oppose any attempt to move any of our state employee members to a “contributory” system. We continuously remind the state legislators that the state retirement defined benefit plan was “closed down” in 1997 and then Governor Engler told everyone that this transformational change would save Michigan taxpayers “…hundreds of millions of dollars” in future years.
We will continue to meet with Legislative leaders and remind them of the extraordinary sacrifices that state employees have made in the last 8 years. Please watch this column for future updates.
Latest Version of SB 1226 (voted out of Senate April 14, 2010) (pdf)
Status:
Currently in the House on second reading
Notes:
Rep. Mark Meadows (D-East Lansing): "The likely proposal will probably be a reflection of the school employee's bill with a 1.6 multiplier if you already qualify to retire and a 1.55 if you only qualify because of an 80 and out or a 30 and out. The 3% contribution to retiree health benefits will also be in the bill. I do not expect labor organizations to support the bill. I would like to see the multiplier increased since we ended up with only about 2/3 of the eligible school employees taking the early out. I would also like to see the current defined contribution members have the option to participate in the so called "hybrid" plan that was imposed on new school employees. Of course, there is a downside to this since there would have to be a 3% contribution to that program as well."
Sponsors:
Sen. Mark Jansen (R-Grand Rapids), Sen. Judson Gilbert II (R-Algonac), Sen. Wayne Kuipers (R-Holland)
Supporters and Opponents:
Supporters:
Senate - Allen, Garcia, Kuipers, Richardville, Birkholz, George, McManus, Sanborn, Bishop, Gilbert, Nofs, Stamas, Brown, Hardiman, Pappageorge, Switalski, Cassis, Jansen, Patterson, Van Woerkom, Cropsey, Jelinek
Opponents:
Senate - Anderson, Cherry, Hunter, Prusi, Barcia, Clark-Coleman, Jacobs, Scott, Basham, Clarke, Kahn, Thomas, Brater, Gleason, Olshove, Whitmer