Introduced
by
To increase the pension benefits of school employees who are currently eligible to retire with a full pension if they do so before Sept. 30, 2012. This includes those whose age and years of employment add up to at least 80 (for example, a 55-year-old who started work in a school at age 30). Also, to expand the eligibility criteria to include some other employees, and also grant these a pension increase if they leave this year. The benefits hike would be 6.7 percent for the first group, and 3.3 percent for the second. However, the increases would only apply to the portion of their pension based on final compensation below $90,000 per year, with benefits based on compensation above that subject to the normal “multiplier” in the pension calculation formula. Note: Because newly hired Michigan school employees are still being enrolled in a “defined benefit” pension system (unlike new state employees hired since 1997, who instead get 401k contributions), this “early out” bonus would increase the system’s unfunded liabilities, while simultaneously adding a new cohort of future retirees who would further increase the system’s (and taxpayers’) liabilities going forward.
Referred to the Committee on Appropriations
