Pension bill update: Positive developments
MEA supports amended Senate Bill 1227
The state House may vote as early as Tuesday on a more employee-friendly version of Senate Bill 1227, legislation that would encourage thousands of public school employees to retire early.
School employees would receive a slightly higher pension if they retire this year under the latest draft of the bill. Numerous negative provisions in earlier drafts have been removed, including the proposed loss of dental or vision insurance for retirees and a hybrid retirement plan for new employees.
MEA now supports the legislation as rewritten by Rep. Mark Meadows, D-East Lansing, which includes an incentive to those who retire by July 1 or Oct 1.
Under Meadows' proposal, school employees who apply to retire on or before July 1, 2010, would receive a 1.7 percent multiplier to determine their pension amount; those who apply to retire after July 1 but before Oct. 1, 2010, would receive a 1.6 percent multiplier. (Those who apply to retire after Oct. 1 would receive the standard 1.5 percent multiplier, a figure that is multiplied by an employee's final average compensation times their years of service to determine an individual's pension.)
The bill would require all school employees to contribute an additional 3 percent of salary above what they currently pay, but the money would be placed into a special trust to fund retirement health benefits. Without this provision, health insurance for you and other future retirees will remain under attack.
Notably, the bill no longer contains the following:
Stay tuned for the latest developments on Senate Bill 1227 next week. If we need your help to encourage lawmakers to pass this version of the bill, we will let you know as early as possible.
Please note: MEA members who are eligible for retirement are advised to wait to submit any paperwork until the Legislature and Gov. Jennifer Granholm pass a final bill.
April 23, 2010