Legislature, Governor making changes to Senate Bill 1040 to address teachers' concerns
LANSING--Teachers and other school employees will not see certain retroactive changes to retiree health care benefits after legislative leaders and the Snyder administration decided to remove components from Senate Bill 1040. Additionally, elimination of the retroactive graded premium keeps current age requirements the same.
"The school employee retirement system, as it exists today, is simply unsustainable. We have to act and act soon." Gov. Rick Snyder said. "This agreements shows that working together we can and will advance a plan that is fair and affordable to both our valued teachers and other school employees as well as taxpayers, and that helps bring stability and protection for continued benefits now and in the years to come."
Efforts to put the retirement system back on solid ground are being made to ensure benefits are affordable and available to workers in the future.
"We are currently faced with a staggering $45 billion unfunded liability in MPSERS. If we do nothing, the retirement system relied upon by thousands of Michigan teachers and school employees will be put at risk" said Senate Majority Leader Randy Richardville, R-Monroe.
"In the interest of fairness and in response to inquiries from public school employees who have expressed concerns about making plans for their retirement, we have decided to remove the 60 year age provision under this legislation and to eliminate retroactively imposing graded healthcare premiums on retirees.
Retirement is a significant life decision and one that is made with great planning and consideration for the future. These changes to Senate Bill 1040 were made in order to mitigate the impact of the unfunded liability on those nearing retirement," said Richardville.
As introduced, Senate Bill 1040 would have applied a graded retiree health care premium subsidy to all current employees hired before July 1, 2012 and would have required most current employees to be 60 years old before they could receive retiree healthcare benefits.
"These changes highlight the importance of the robust committee process we have established this term - it provides ample opportunity for people to raise questions that help alleviate unintended consequences. We listened to teachers and we heard their concerns about having to make a quick decision about their retirement plans. They made a good point in comparing any proposal to recently adopted state employee retirement reform. Teachers will now be able to take some time to gather all the information they need when making this important decision," said Speaker of the House Jase Bolger, R-Marshall.
Important and critical work continues to preserve other components of post-retiree benefits for school employees and find a solution for the $45 billion unfunded liability currently facing the system.
Posted: Monday, May 07, 2012
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