Delta-Kappa-Gamma

LEGISLATION COMMITTEE

You received the Legislative handbooks from Eileen DeHart’s office with this bulletin.

On May 19,1995 the MPSERS Board approved the concept of a graded premium insurance subsidy structure to promote equity and to assure financial well-being of our health insurance plan. The equity issues are:

1. Since the pension benefit is based on earned service credit, the health insurance should be based on earned service credit;
2. Since the pension is reduced for early retirement, the health insurance subsidy should be reduced for early retirement.

The cost issues are the inflation of health care costs, but also that over the next 25 years the MPSERS’ retired population will almost double. The full benefit, 90% subsidy paid by the school district and 10% paid by the retiree, would be reached at thirty years service credit.

The proposed implementation date would be two years from the date of enactment and would apply to all members not eligible to retire by that date. Current retirees and those eligible for retirement at the effective date of this legislation would be affected.

We now have a defined benefit retirement plan. Senate Bills 169-175 are waiting for action. Inform your legislators that we do not support the switch to defined contribution. Write to the Senate Financial Services Committee:

Michael Bouchard, Loren Bennett, Mike Rogers, James Berryman, Kenneth DeBeaussaert

Michigan State Senate

P.O. Box 30036

Lansing, Michigan 48909

There is a proposal to restructure the Michigan Public School Employees Retirement System. It is now under the Department of Management and Budget and is administered as a government agency. The MPSERS Board believes that since the School Finance Reform (Act 335 of PA 1994) took the responsibility of ensuring adequate retirement funding from the state and placed full responsibility on the schools themselves; those who fund the retirement system should administer it. At this time local school districts are not represented on the board.

The Board proposes a separation from the Department of Management and Budget with MPSERS becoming a public non-profit corporation with all of the authority to manage and administer retirement benefits. Most public school retirement boards across the nation already have this authority and responsibility.

The State Supreme Court ruled on April 25, 1995 that health insurance benefits are part of the financial benefits promised in the Constitution and that the governor violated the Constitution. They also said that they did not have the authority to have the funds deposited. The governor appealed because he believed he was not wrong and the MEA appealed because they believe the Supreme Court can order the funds deposited. For the first time in the history of the Michigan Supreme Court they agreed to rehear their own case. It was reheard on October 11 and they have yet to issue the opinion.

The mandatory core curriculum is eliminated from the school code and is instead recommended. Classroom instruction will be allowed by persons who are not certified teachers.

Nancy Bielik, Legislation Chairman