Capitol Rumors Point to a Coming Pension Attack

From Capitol Comments:

MEA members need to be ready for another pension battle. Based on intel picked up around Lansing, we believe the state Senate may be on the verge of kicking off its latest effort to move newly-hired school employees to a 401(k)-type retirement system – similar to the threat we successfully beat back in last year’s lame duck session.

Sometimes we gather legislation information through sources other than bills being introduced. Last week, Business Leaders for Michigan issued a report that garnered media attention around the state saying all new hires at school districts should be forced into a 401(k)-type system. Then an article about the state budget appeared that talked about how the House and Senate are proposing cuts that spend less than the amount Gov. Rick Snyder proposed earlier this year. Next, in another article Senate Majority Leader Arlan Meekhof (R-West Olive) says moving new hires to a defined contribution system is still his priority.

Read between the lines, listen to the rumors flying around the Capitol, and it’s pretty clear something is coming.

Right now, although there is no legislation introduced, we believe their plan would follow last year’s proposal for new hires to go into a defined contribution system, instead of the hybrid system implemented in 2011 (which Gov. Snyder supports). This change would cost the state at least $500 million for the first year – and as much as $1.6 to $3.8 billion over the next five years. The Senate has proposed a cut of $275 million from Snyder’s budget recommendations, which they could use to help pay for that $500 million this year, perhaps pulling the rest of the money from the state’s rainy day fund.

Right now, this is all based on rumor, media coverage and other intel. Please stay tuned to Capitol Comments and MEA’s Facebook page for more information as we learn more. In the meantime, get ready to make phone calls and emails – we will need your help to stop this latest attack on school employee pensions, which ignores the growing teacher shortage and the crumbling pay and benefits contributing to the problem.

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