Pension Reform

It is unclear what effect Proposal 2 would have on a long-established reform of Michigan’s government-employee pension and benefit systems. In 1996, the Legislature “closed” a costly defined-benefit pension plan in the Michigan State Employees’ Retirement System, thereby preventing state employees hired on or after March 31, 1997, from participating in the plan.[89] One estimate suggests Michigan taxpayers have avoided as much as $4.3 billion in government pension underfunding as a result.[90]

Pension benefits would clearly be a legitimate subject of collective bargaining under Proposal 2. On the other hand, the Civil Service Commission would have to approve any such collective bargaining agreement, and the CSC did not prevent the Legislature from closing the plan in the first place.