Granholm: Change pensions to save money

LANSING, Mich. - In a bid to reduce state spending by up to $450 million, Gov. Jennifer Granholm has proposed modifying the pension and health care plans for future school and state retirees, but also would offer an incentive to any who retire this summer, according to media reports.

Speaking to the Lansing Rotary Club, Gov. Granholm said employees with at least 30 years of experience who retire between July and September would get a pension boost ranging from $1,000 to $2,000 per year, according to reports in the Lansing State Journal and The Oakland Press. But the proposal also would cut spending by requiring employees to contribute more to their own pensions and by cutting retiree dental and vision benefits, the Journal reported.

Granholm also suggested consolidating school districts and services, and aligning the school and state budget years, The Press reported. The proposals would require legislative approval.

Michigan Education Association spokesman Doug Pratt called the retirement incentive "pretty tiny" and a "political game and gimmick," the Journal reported.

Steve Serkaian, spokesman for the Lansing School District, told the Journal that aligning the state and school budget years would help schools by providing state funding information earlier. Currently, schools must adopt budgets by July 1 and sometimes don't know their per-pupil funding level until the state budget is adopted Oct. 1, the Journal reported.

Lansing State Journal, "Retirees from schools get boost, but others to see cut in benefits," Jan. 30, 2010

The Oakland Press, "Granholm proposes retirement plan to cut costs," Jan. 29, 2010

Mackinac Center for Public Policy, "Public Pension Plans Need to Reflect Reality, Jan. 3, 2006