May 18, 2012 Bookmark and Share

Reps Urge Caution on Teacher Retirement Bill

Complex issue deserves careful deliberation

LANSING - State Representatives Ellen Cogen Lipton (D-Huntington Woods), Rep. Sean McCann (D-Kalamazoo), and Richard LeBlanc (D-Westland) today called on the House Appropriations Committee to move deliberatively in its consideration of Senate Bill 1040, which makes significant changes to the Michigan Public School Employment Retirement System (MPSERS). The bill was narrowly voted out of the Senate on Thursday, May 17, and the House has scheduled a meeting of the House Appropriations Committee to consider the bill for Monday, May 21, from 9 to 11:30 a.m. The new Monday meeting time for the Appropriations Committee was not announced until this morning, which makes it nearly impossible for teachers and retirees to attend and speak on the bill which directly changes their retirement benefits.

“Apparently this bill is going to be fast tracked because the majority has changed the normal Appropriations Committee meeting day from Wednesday to Monday in order to consider SB 1040,” said Lipton, who is a member of the Appropriations Committee and the Minority Vice-chair of the School Aid Subcommittee. “We need to make sure that we have more hearings to allow stakeholders to share their concerns. Numerous constituents have contacted me regarding their opposition to this bill and they deserve to be heard. This is too complex an issue to be dealt with quickly.”

SB 1040 would end pensions for new public school employees Jan.1, 2013. It creates a new 401(k) style retirement plan which is estimated to cost hundreds of millions of dollars. Current employees would see a cut in pay to maintain their pension. School retirees would see another cut in their pension from SB 1040 on top of the new pension tax. These changes together constitute another attack and a new tax on teachers who will, in effect, be double taxed: they lose money out of their retirement checks to the new senior pension tax and then lose again with the cuts to their retirement under SB 1040. In addition, there will be a new version of the bill given out at the Monday meeting which members have not yet received for review.

“SB 1040 makes significant changes to teacher retirement, and teachers and school administrators deserve ample opportunity to study and comment on this bill, so I hope Monday’s meeting is just the first of many to give teachers and retirees with a stake in this bill a chance to speak,” said McCann.

Senate Bill 1040 was introduced in March in the Senate and referred to committee where the bill had several hearings before it was voted out to the Senate floor on May 16th.

“It looks like SB 1040 may be on the fast track, but this it too important a bill and issue to rush its consideration,” said LeBlanc. “We need to work carefully on the bill, listen to the people it will affect, and give appropriate consideration to the effect this bill will have on the state before we take a final vote.”

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