University employees to see changes in retirement benefits, pension

A new Michigan Senate bill will reduce retiree benefits for public employees enrolled in the Michigan Public School Employees Retirement System, including some at Central Michigan University.

Senate bill 1040, signed into law by Gov. Rick Snyder on Wednesday, Sept. 5, is a series of reforms to MPSERS. The bill requires select teachers and administrators enrolled in MPSERS to pay about 10 percent more for health premiums, increase salary contributions toward benefit pensions and reduce a portion of the cost for school districts.

“We have effectively solved a tremendous problem facing our schools,” said state Sen. Roger Kahn, R-Saginaw, a sponsor of the bill. “We had to take action to provide relief from the massive liabilities that were draining resources from the classroom. Schools can now plan their budgets knowing that retirement costs are capped and in check for the future.”

Reforms to the current system include new voluntary elections regarding both retirement healthcare and pension for each employee.

“Your decisions affect what your healthcare and pension benefits provide you in retirement, as well as how much you contribute toward those benefits,” said an announcement on the State of Michigan webpage for the Office of Retirement Services.

According to a document on the Michigan.gov website, there are seven public universities that are members of MPSERS, and only the employees hired before Jan. 1, 1996, are members of MPSERS. Public school academies have the option of joining.

According to an April Central Michigan Life article, Sen. Mark Jansen, R-Grand Rapids, sponsored the Senate bill. Deborah Drick, Chief of Staff for Jansen, said the MPSERS reform was much needed.

“MPSERS has been a system that has been going along, and because the economy kind of took a tank and because of other contributing factors, the MPSERS plan in itself is unsustainable,” Drick said in April. “There’s a lot more liability than there is revenue.”

The Benefits Office at Central Michigan University held a workshop for employees on Thursday, Sept. 6, to inform them of the changes and the new options available under the legislation. Another workshop will be held Wednesday, Sept. 12.

“Resolving this tremendous debt and financial burden helps our schools, our children, the taxpayers of Michigan and ultimately our school employees by ensuring their retirement benefits are funded,” Snyder said in a news release. “I appreciate all the hard work by the Legislature to get this done.”