Introduced
by
To establish a new state regulatory and oversight regime for pensions and other post-retirement benefits (OPEBs) offered by local governments to their employees, including retiree health insurance benefits. Note: The bill treats pension obligations and retiree insurance promises similarly. However, while the state constitution requires pensions to be paid-for as they are earned and prohibits any impairment of them, post-retirement health insurance promises need not be funded in advance, are not considered enforceable obligations on taxpayers, and can be trimmed or eliminated at any time. Also, like other Americans, local government employees all qualify for federal Medicare benefits when they turn 65.<br> The bill is part of a package comprised of House Bills 698 to 701 that would impose more state oversight, disclosure requirements and minimum funding requirements for these local retirement systems, and authorize “emergency manager”-type receivership provisions if local officials fail to meet the standards by specified deadlines. Other provisions could potentially include cutting local government retirement health coverage, or placing property tax increases on local ballots to pay for the benefits.
Referred to the Committee on Michigan Competitiveness
Reported without amendment
With the recommendation that the bill pass.
Passed in the Senate 36 to 0 (details)
To establish a new state disclosure and oversight regime for pensions and other post-retirement benefits (OPEBs) offered by local governments to their employees, including retiree health insurance benefits. Local governments would have file annual reports on the extent to which the future benefits they have promised are underfunded, using standards the state Department of Treasury would be required to establish. Locals that fail to meet certain funding levels, or that spend more than 12 percent of their budget to prefund benefits (or catch up on past underfunding) would be required to submit a corrective action plan. Provisions authorizing “emergency manager”-type receivership provisions for local governments that fail to meet the standards by specified deadlines were not included in the final version of the bill.
Received
Passed in the Senate 38 to 0 (details)
To concur with the House-passed version of the bill.
Received
Received
Substitute offered
by
To replace the previous version of the bill with one that revises details but does not change the substance as previously described.
The substitute passed by voice vote
Passed in the House 104 to 5 (details)
To establish a new state disclosure and oversight regime for pensions and other post-retirement benefits (OPEBs) offered by local governments to their employees, including retiree health insurance benefits. Local governments would have file annual reports on the extent to which the future benefits they have promised are underfunded, using standards the state Department of Treasury would be required to establish. Locals that fail to meet certain funding levels, or that spend more than 12 percent of their budget to prefund benefits (or catch up on past underfunding) would be required to submit a corrective action plan. Provisions authorizing “emergency manager”-type receivership provisions for local governments that fail to meet the standards by specified deadlines were not included in the final version of the bill.
