Jansen: Retirement reforms approved by subcommittee could save state millions
LANSING — The Senate Appropriations Subcommittee on Retirement approved legislation Tuesday designed to save the state money by encouraging eligible state employees and public school employees to retire, said Sen. Mark C. Jansen, subcommittee chair.
“While still a work-in-progress, these major reforms will help save the state millions of dollars during tough economic times. I am pleased that they are moving forward,” said Jansen, R-Gaines Township. “The state must look at ways to save the taxpayer’s money.”
Senate Bill 1226, sponsored by Jansen, would reform the Michigan State Employees’ Retirement System (SERS) to encourage eligible state employees with 30 or more years of service to retire.
The legislation would reinstate a 3 percent employee contribution to help ensure SERS remains financially sound.
Other measures to encourage eligible state employees, who are members of the defined benefit plan to retire, include capping the earned service credit at 30 years and eliminating state-subsidized retiree vision, dental and hearing coverage as part of the health plan for state employees retiring after September 30, 2010.
The committee also approved Senate Bill 1227, sponsored by Sen. Jud Gilbert, which would implement a more cost-effective plan for public school new employees and allow phased-in retirement for some workers.
“By including public school employees in these reforms, local districts could save $3.5 billion over the next 10 years,” Jansen said. “The school retirement reforms will continue to allow charter schools to opt into the Michigan Public School Employees’ Retirement System.”
Under SB 1226, the reforms could save the state $370 million gross from FY 2011 to FY 2020. Reforms under SB 1127 could affect approximately 39,000 public school employees.
The measures will now advance to the Senate Appropriations Committee for consideration.
Posted: Wednesday, March 24, 2010
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