Capitol Comments 2
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Offering MEA members weekly updates of events Volume IX, Issue 16 and happenings in Michigan's Capitol. Monday, October 27, 2003 INSIDE THIS ISSUE: ! Granholm Announces Capitol Budget Forums ! Proposal to Reduce Retirement Benefits Comments Comments Compiled by MEA lobbyists. Contact MEA Government Affairs Department at 800/292-1934. Granholm Tuesday, November 4 - Marquette Proposal to Budget Conversation WNMU TV Announces 13 - 7:00 p.m. simulcast on Reduce Budget Forums WNMU public radio Retirement Thursday, November 6 - Flint Governor Jennifer M. Benefits Budget Conversation WJRT-TV Granholm today unveiled her 12 - 7:00 p.m. schedule for forums to discuss the Recently, MEA received a state's $900 million budget deficit. summary of draft legislation Monday, November 10 - Michigan These events will offer citizens an designed to gut the current defined Public Radio Statewide call-in opportunity to voice their feelings benefit pension plan and to show - Noon to 1:00 p.m. about how to solve the $900 severely limit health insurance for million budget deficit. school employees. So far, no bills Monday, November 10 - Michigan "We have inherited a massive have been introduced. MEA Government Television (MGTV) problem, and we need every strongly opposes these proposed call-in show - TBA citizen's input to solve it. Limiting changes. our conversation to a relatively Some school administrative Tuesday, November 11 - small audience limits the value of groups are supporting these Southeast Michigan Budget what our citizens can bring to this concepts and, now, apparently Conversation WDIV-TV 4 - 8:00 discussion," Granholm said. "This some members of the Michigan p.m. budget represents the people's Legislature are considering it. money, and we want to hear what The plan would force new Wednesday, November 12 - Grand they will be willing to pay for and school employees to switch from Rapids - Battle Creek Budget what they are willing to cut. We the current defined benefit Conversation WOOD-TV 8 - 7:00 can't make these decisions behind retirement system to a defined p.m. closed doors in Lansing." contribution plan. Such a plan The Governor needs to hear would pay significantly reduced Thursday, November 13 - Lansing from you on how these budget pension benefits to school Budget Conversation WILX-TV cuts have hurt education and the employees. 10 - 7:00 p.m. students we educate. Alpena and Macomb county Defined Contribution Below is the schedule announced events TBA. Plan by the Governor: The MEA will keep you Wednesday, October 29 - WJR According to the summary, a posted as more information Radio (Detroit) 760 AM "Ask the Defined Contribution Plan will becomes available regarding the Governor" with Lloyd Jackson, be created for all new employees: schedule, format and procedures in 7:00 p.m. (800) 859-0957 effect at these events. Please The school district will contribute watch future issues of Capitol Monday, November 3 - Traverse 4% of payroll to the 401k account. Comments and the MEA Web City Budget Conversation WWTV The school district can match up Page for details. 9 and 10 - 7:00 p.m. to an additional 3% contributed by CAPITOL COMMENTS 2 in a Michigan public school. the employee for a total of 10%. Early Retirement Universal Buy-In Service Credit: a This is the same as the state Incentive school employee can only employees plan, which has purchase Universal Service after resulted in state employees losing Tie-barred to the defined 15 years of service credit. This thousands of dollars in pension contribution plan and graded will have cost school employees benefits. In addition, there is a premium subsidy plan is an Early thousands more dollars by forcing provision where current Defined Retirement plan. them to wait 15 years before such Benefit members can apply to Many ERI details in this draft service credit can be purchased. transfer to the Defined legislation are lacking, however There are many in Lansing Contribution Plan between 9/30/04 the plan calls for an increase in the and in the ranks of school and 12/31/04. multiplier to 1.75% from 1.5% for administrators who would like to The proposed contribution rate of those who elect to retire between eliminate the current defined 4%, combined with the possibility December 1, 2003 and December benefit pension for school of an additional 3% contribution 31, 2003. Retirements would be employees and replace it with a plus match, is insufficient to effective July 1, 2004. defined contribution plan. MEA provide the pension and benefits Early retirees would be charged an has always opposed such that are guaranteed under the additional $100 per month for proposals that want to limit current system. Districts now pay health care insurance, and pension and health benefits to 12.99% of their payroll into the beginning July 1, 2006, this school employees, and we will do retirement system. amount will be increased annually so again if any ERI bill is tie- by the previous year’s Consumer barred to defined contribution and Graded Premium Price Index (CPI). graded premium subsidy plan. Subsidy Each school district will be This proposed “draft legislation” required to pay $15,000 per person would be highly discriminatory Tied-barred to this concept is to the pension fund, which will not and is of no benefit to MEA a Graded Premium Subsidy offset the additional cost of the members. program for all new employees, a incentive. This plan would cost We will carefully review any way to drastically reduce health the retirement system millions of legislation that is designed to benefits: dollars if adopted. For example, benefit school employees and the average teacher with a retirees, if it is ever introduced. Employees would be vested for master’s degree would receive MEA’s position will be based on health benefits after 20 years of more than $100,000 in additional the well being of the school service. Upon retirement, an benefits over a lifetime. employees and retirees who are employee’s health insurance School districts would be the members of MPSERS and the premiums would be subsidized 3 prohibited from providing MEA. The MEA supports an % or each year of service. The additional retirement incentives to increase in the multiplier to 1.75% maximum subsidy would be employees. for all school employees if such a dependent on school employees plan can be achieved. working 30 years to receive 90% subsidy. As an example, someone Additional Changes in who retires after 20 years of the Draft Document service would receive payment for 60 % of the health insurance Earnings limits are changed MEA Government Affairs premium and would have to pay from one-third of Final Average 800/292-1934 the remaining 40 % out of his or Compensation to one-half of MEA Web Page her own pocket. Currently an Final Average Compensation for http://www.mea.org employee with 10 or more years of those retirees who return to work service is entitled to a full insurance subsidy upon retirement. .