SB 102 would have closed down the Michigan Public School Employees Retirement System (MPSERS) current hybrid pension system to new school employees hired after July 1, 2017 and put them into a 401(k)-style defined contribution plan. Employees currently in the hybrid plan-a combination of a defined benefit plan and a 401(k)-could remain in MPSERS, but those school employees who chose the defined contribution plan in 2012 would be moved into the new plan.
Under that plan, school districts would deposit 4 percent of the new employee’s salary into a 401(k) and match the employee’s contribution up to another 3 percent of salary-or a possible employer contribution of 7 percent. The cost of the match would be borne by the School Aid Fund.
Employees in the new 401(k) plan would be immediately vested in their own contributions; 50 percent vested in their employer’s contributions after two years; 75 percent vested after three years; and 100 percent vested after four years of service.
SB 1177 and SB 1178 dealt with the amortization period to pay off MPSERS’ unfunded liability.
It seemed that once the bills passed the Committee and moved to the full Senate, immediate passage would be inevitable since MPSERS pension reform was at the top of the Republican’s agenda. But the bills stalled because of discrepancies in the cost of transitioning to a new system and couldn’t get the necessary votes to get them passed.
The Senate Fiscal Agency estimates the additional cost of closing down MPSERS and moving new employees to a 401(k) to be $591 million in the first year to $3.8 billion in five years. In contrast, the Office of Retirement Services (ORS) estimates the cost to be $500 million in the first year and more than $24 billion in costs over 30 years-more than any unfunded liabilities. ORS didn’t support the Senate’s pension reform.
HB 6074 was the main bill which created the Local Unit of Government Retirement Act. Starting in May 2017, new municipal employees would get 2 percent of their base pay annually for retiree health care to be paid into a tax-deferred savings account like a 401(k) or a health savings account (HSA) according to the Act. .
Retiree healthcare benefits would be a prohibited subject of bargaining, and retirement plans and HSAs would be excluded from arbitration awards for police and fire. Retirees who went to work somewhere else could not get municipal health insurance if coverage was available with their new employer.
MEA Acting on School Closure Threats
MEA is moving forward with a multi-pronged response to state threats of school closures in a number of Michigan communities – mostly in high-poverty areas – which have prompted fear and outrage among school employees and parents.
Our lobbyists will be actively supporting a bill to repeal the so-called “failing schools law” that is driving potential building closures. Sen. Phil Pavlov (R-St. Clair) introduced Senate Bill 27
to eliminate a “chaotic” and “deeply flawed” process that has not improved academic achievement.
“In the six years this law has existed, it has produced more questions than answers and more controversy than solutions,” Pavlov said in a statement. “The initial goal was laudable: improvement of the state’s worst academically performing schools. Yet the evidence raises serious doubts about whether that has been accomplished.”
MEA members can help by contacting local legislators to encourage their support of Pavlov’s bill, and by asking parents and other community leaders to get involved.
Adopted in 2010 to compete for federal grant money, the current law requires the Michigan Department of Education to issue an annual top-to-bottom ranking
of schools based on test scores. Schools listed in the bottom 5 percent for three consecutive years are at risk of closure.
“It begs the question whether there isn’t a better accountability system, one that does more than simply flag high poverty schools,” Kalamazoo Public Schools Superintendent Michael Rice told reporters after the list came out with two KPS schools included on it.
Under the looming threat of school closures since last summer, MEA has been working with a number of organizations and stakeholders to fight back against ill-conceived policies that do nothing to serve the needs of children in struggling communities.
The group’s strategies will include legal action if school closures are ordered.
“MEA supports adequately funded, high-quality public schools and respect for community control,” said MEA General Counsel Mike Shoudy. “Closing neighborhood schools is bad for children, families, and the employees who serve them.
“MEA will take any and all appropriate legal action to protect the educational opportunities of our students and the employment rights of our members.” CLICK HERE
to read more at mea.org
Wear Red for Public Ed on Tuesday 1/31/17 to Oppose DeVos
On Tuesday, a U.S. Senate Committee will decide if the full chamber should vote to confirm Betsy DeVos as Education Secretary despite being unqualified and unfit for the job. Join MEA and AFT Michigan members in demonstrating opposition that day-Wear Red for Public Ed on Tuesday, Jan. 31.
DeVos is no stranger to Michigan educators and students who have suffered under policies pushed by her and her billionaire family’s contributions to Republican politicians for years. Her support of unaccountable for-profit charter schools in Michigan has harmed children and communities.
Both of Michigan’s U.S. Senators, Debbie Stabenow and Gary Peters, have announced plans to vote against her.
“Betsy DeVos and her family have a long record of pushing policies that I believe have seriously undermined public education in Michigan and failed our children,” Stabenow said. “Therefore, I cannot support (her).”
In a speech on the Senate floor
, Peters pointed out DeVos’ only education experience has involved lobbying for the transfer of taxpayer money to private schools and the rapid expansion of charter schools without sufficient accountability to parents and students.
Most charter schools – about 65 percent – fail to significantly outperform traditional public schools in reading outcomes. In Detroit, 70 percent of charter schools are in the bottom quartile of Michigan’s schools-not the results we want to replicate at the national level, Peters said.
“I stand with the many educators and parents in Michigan and across this nation when I say: Mrs. DeVos lacks the experience, qualifications and the right vision to oversee our nation’s education system,” Peters said. “Simply put, our children deserve better.”
Wear Red for Public Ed on Tuesday to show we remain united by our common belief in great public schools for all of our students!