Marathon Meeting Held on MPSERS

With an unfunded liability of more than $45 billion, the Michigan Public School Employee Retirement System (MPSERS) is in need of reform according to Senate Republicans. What the reform should look like remains an unanswered question after a marathon hearing of the Senate Appropriations Retirement Subcommittee Wednesday.

The legislation in question is Senate Bill 1040, introduced by Senator Roger Kahn (R-Saginaw). The measure essentially requires MPSERS participants to choose between an 8-percent contribution to their pension, a smaller retirement multiplier (1.25 rather than 1.5 percent) or move to a 401(k)-type retirement system. Further, the legislation places a maximum of $100,000 on compensation and does not allow participants to begin collecting until age 60 rather than 55.

The Office of Retirement Services has indicated the reform could save as much as $380 million in the first year - $260 in reduced pension costs and $120 in reduced retiree health care costs. The hearing room in the Boji Tower was overflowing with individuals hoping to testify – with a significant portion speaking in strong opposition to the measure.

posted by PAA Online , Friday, April 13, 2012 9:44 AM
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