The latest legislative assault on retirement was launched on Thursday in the form of Senate Bill 1040. The bill makes sweeping changes to limit the pension benefits received by employees while increasing the out-of-pocket costs for both active and retired members.

MEA is conducting further analysis of SB 1040, but it is clear that this bill dismantles the retirement security of thousands of Michigan school employees and their families. MEA recently joined the Coalition for Secure Retirement and will be working through that coalition to fight against these destructive bills.

Key provisions of SB 1040 include:

• Increased contribution rates (to 5% for Basic or 8% for MIP, PLUS the additional 3% for retirement health) to retain the current multiplier of 1.5% for future years of service in the calculation of a pension.
• Employees choosing to not pay the higher contribution rates would either have to freeze their defined benefit accrual and shift to a 401(k) style plan with a 4% employer contribution ORhave the multiplier for any future service lowered to 1.25%.
• Retroactively impose the graded premium subsidy program on all active employees (rather than only those hired after July 1, 2008).
• Cap the premium payment for retirement health benefits at 80% for active AND retired members — effectively doubling the premium payment for many current retirees.
• Eliminate retirement health benefits for all future hires, replacing it with an employer-matched health savings account, and cap final average compensation at $100,000 for new employees.

For a full rundown of SB 1040′s impacts on current employees and retirees, view CSR’s Action Alert.

Contact Information for Genesee County Senators:

State Senate District #26

David Robertson (R)

(517)-373-1636

SenDRobertson@senate.mi.gov

State Senate District #27

John Gleason (D)

(517)-373-0142

SenJGleason@senate.mi.gov