A bill to amend 1980 PA 300, entitled, “An act to provide a retirement system for the public school employees of this state; to create certain funds for this retirement system; to provide for the creation of a retirement board; to prescribe the powers and duties of the retirement board; to prescribe the powers and duties of certain state departments, agencies, officials, and employees; to authorize and make appropriations for the retirement system; to prescribe penalties and provide remedies; and to repeal acts and parts of acts,” by amending sections 41 and 43e (MCL 38.1341 and 38.1343e), section 41 as amended by 2023 PA 198 and section 43e as amended by 2012 PA 300.
The bill would reduce pension contributions into the school retirement system when the state has saved enough to prefund the costs of retiree healthcare benefits. Under current policy, the state will not put less into the retirement system until all the debts are prefunded. And while retiree health care benefits have now been fully prefunded, the state still owes pensioners $29.9 billion more than what has been saved. The $670 million that had been used to prefund retiree health care benefits would be moved to paying down pension debts.
The bill would allow the state to take the $670 million and spend it on other priorities.
The state accidentally made school employees the state’s largest creditors by promising pension benefits and not setting aside enough money to pay for them. Lawmakers have been trying to pay down those debts and prevent itself from going further into pension debt. The bill would delay debts from being paid down and cost taxpayers $1.4 billion due to additional interest costs.
Introduced
by
Referred to the Committee on Appropriations
Discharged from committee
Referred to the Committee of the Whole
Reported with substitute S-1
Substitute S-1 concurred in by voice vote
Passed in the Senate 20 to 17 (details)
Referred to the Committee on Appropriations
Discharged from committee
Substitute H-3 offered
by
The substitute passed by voice vote
Passed in the House 56 to 54 (details)
Motion to give immediate effect
by
The motion prevailed by voice vote
Substitute S-2 offered
by
The substitute passed by voice vote
Substitute S-2 concurred in 20 to 16 (details)
