Michigan Legislators Don’t Receive Pensions

Now let’s solve the problem for the rest of government workers

In the push to offer new school employees a 401(k)-type retirement package, the most common response by those opposing the idea has been some variation of the question, “Why should teachers not receive pensions when politicians do?” But state policymakers and their staff do not receive pensions or health care once out of office.

Legislators receive a defined contribution, 401(k)-type plan. Like all state employees since 1997, 4 percent of their salary is deposited into an individual retirement account and the state will match up to 3 percent more.

In 2011, the Legislature closed the state’s other post-employment benefits plan. Any lawmakers elected after Jan. 1, 2007 no longer qualify for state-paid medical insurance in retirement. The state is also attempting to prefund the remaining benefits still out there for people who are in the system from before the law changed.

Michigan’s pension systems are underfunded by at least $40 billion. Whether at the state or local level, it has been proven time and time again that politicians don’t properly fund defined benefit pension systems. The best way to solve this problem is to close the system by offering new members a defined contribution plan, protect current retirees and workers and pay down the debt.


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