Senate plan drops pension ‘sweetener’

LANSING, Mich. - The Michigan Senate has adopted a revised plan intended to save about $230 million by nudging eligible state workers and public school employees into retirement, according to the Lansing State Journal.

The new plan requires state and public school employees to begin contributing 3 percent of their salary toward their retirement unless they retire before Oct. 1, the Journal reported.

An earlier version of the plan also would have eliminated retirees' vision and dental coverage for anyone not retiring by October, but that provision was removed, the Journal reported. Also removed was a pension "sweetener" that would have boosted payouts for those agreeing to retire, according to the Journal.

The bills now move to the House of Representatives, but Rep. Martin Griffin, D-Jackson, said he saw no reason to take up the Senate bills because few people are likely to retire without the pension boost, according to the Journal. Griffin is chairman of the House Oversight and Investigations Committee, which already is considering Republican-sponsored bills on the retirement system, the Journal reported.

WILX-TV, Lansing, reported that teachers and state workers said they are less likely to retire without the boost.

"Educators all over the state are outraged," Doug Pratt, communications director for the Michigan Education Association, said of the plan, according to WILX.

SOURCES:
Lansing State Journal, "Senate OKs state retirement proposal," April 15, 2010

WILX-TV, Lansing, "Reaction to Senate Retirement Plan," April 15, 2010

FURTHER READING:
Michigan Capitol Confidential, "Analysis: Government Employee Political Clout Obstructs Budget Reform," April 13, 2010