MASB Issues Statement on Michigan Senate Committee’s Decision to Move MPSERS Bill

LANSING, Mich.  Don Wotruba, Executive Director of the Michigan Association of School Boards, issued the following statement on the Michigan Senate Committee on Appropriations’ decision to move a bill that would close the MPSERS system for new school employees:

“Only two days into the lame-duck session, the Michigan Senate is pushing legislation that would impact school employees with little or no time for public school groups to understand the true impact. This package of bills would close the current retirement system for all new public school employees and move them to a defined contribution/401k-type system. This type of change will cost the School Aid Fund at minimum $1.2 billion over the next five years, which does not account for accelerating payments or other best practices.

“In 2010, Michigan changed to a hybrid retirement plan that is part defined contribution and part defined benefit. That plan is fully funded, creates portability for those employees who don’t plan on staying in education, yet still ensures some income and stability upon retirement based on the state doing some of the investment. At the same time, we eliminated health benefits for future retirees saving the system a tremendous amount of money in the long term. While our districts struggle with the ability to attract and retain new teachers, the current hybrid plan is an attractive benefit for potential new talent that provides a sense of security during retirement, as well as being 100% funded and has no unfunded liabilities for the state.

“These reforms will affect many Michigan families and should be thoroughly discussed with public debate and input.

The questions we ask the Senate are:

  • Why now? What’s the hurry as the political make-up of the Legislature doesn’t change in January?
  • Can you show us this is not going to cost either schools or the school aid fund significant dollars?
  • Are you just kicking the future costs of this system to some future Legislature or school community?

“This seems like an ideologically motivated package of bills, rather than one based on good public policy. This is a conversation suited for the new session, not for lame duck.  Is it waterfowl season yet?”