Even more changes to SB 1040 expected
The latest version of SB 1040—legislation that attacks school employee retirement benefits—will be taken up tomorrow by the Senate Appropriations Committee. Despite the fact that there is no specific language yet for the bill, MEA continues to monitor the bill’s progress and is providing an updated analysis and talking points reflecting the change so far.
One of the most significant changes is the move to prefund health care and guaranteeing a member’s right to receive health care upon retirement. Prefunding has been a sore point since the Legislature under Gov. Engler decided to stop that practice. Current legislators are quick to claim that the current system is suffering from a $47 billion unfunded liability, but they are slow to remember their predecessor’s decision to stop supporting it.
Another change to SB 1040 reduces the contribution rate from 5 percent to 4 percent for members in the Basic Plan and from 8 percent to 7 percent for those enrolled in MIP.
Other changes to SB 1040 were announced last week. Public school employees hired before June 30, 2008 will still qualify for full health care coverage once they’ve been employed for 10 years. And employees won’t have to wait until they reach 60 years of age to qualify for retiree health care coverage.
The contacts MEA members, leaders and staff have made to Senators are making the current version more tolerable, but there are still areas that will have a severe financial impact on current employees and retirees. Since more changes are expected, don’t rush to make any retirement decisions.
This bill is on a fast track. Tomorrow will be critical since SB 1040 will probably be discharged from the Senate Appropriations Committee. Continue to contact your Senators!