At a special meeting Monday, officials queried State Rep. Mark Ouimet about pension reform legislation that stalled in the state senate last week.
Last Thursday, the state senate adjourned without voting on legislation designed to reform the Michigan Public School Employees Retirement System.
For Saline Area Schools, already dealing with a , that’s $1 million in potential savings unaccounted for with the June 30 deadline for a new budget looming. The senate may take up the matter again when it returns to session July 18.
At issue is the MSPERS retirement rate, the contribution rate that employers pay to the state retirement plan. This year, for every $1 school districts spend on salaries, they must send 24.46 cents (the 24.46 MSPERS rate) back to the state for pension benefits. That rate has more than doubled from 12.17 in 2002. That rate is scheduled to climb to 27.37 percent for the next fiscal year and 31.21 percent the year after.
“Some type of reform must take place,” said Superintendent Scot Graden, adding that he thought it would serve nobody well if the reforms collapsed because of ideology or concerns over short term money.
Graden said with MPSERS rates set to increase substantially, there may be not better time for reform.
“If MPSERS gets to 31 percent, it’s game over here and everywhere else,” Graden said.
Trustee Dave Holden echoed Graden’s concern.
“If (the rate) goes up to 30 percent, all of the sudden we’re retirement plan administrators, not school board members,” Holden said. “We’re getting away from our mission, which is to educate the young people in this community. Instead, we’re just sending our money back into a retirement plan that’s broke.”
Ouimet urged Graden and the members of the board to contact State Sen. Randy Richardville’s office with their concerns.
Ouimet explained that members of the House thought this issue had been resolved in time for school districts to use new formulas for their budget.
“When we left Wednesday, I think there was the collective feeling that everything had been talked through and worked out. And then it just came apart.,” said Ouimet.
The previous day, Ouimet voted for the pension reform that passed in the House by a 57-47 vote.
“The growing retirement debt incurred by our local schools is hurting students, teachers and the state as a whole," said Ouimet, after the legislation was passed. "Gradually moving school employees into a 401(k) system is an effective and fair way to prepare both students and schools for the future. This may be the single most important piece of reform legislation we take up as a body."
In the House version of the reform, current basic plan employees would contribute four percent of their salary to the plan. Those in Member Investment Program would contribute seven percent in addition to the three percent contribution already mandated.
The Saline Board of Education recently voted 5-2 in favor of a.