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School Pension Reform Stalls in State Senate Again

Failure to reform the pension plan could cost the district $800,000 this year and up to $2 million next year.

A plan to reform the state’s school employees pension plan failed to advance in the Michigan Senate Wednesday.

Senate Majority Leader Randy Richardville, R-Monroe, told Mlive.com there weren’t enough votes to pass a compromise plan that would move newly hired teachers to a 401(k) retirement plan. Mlive reported that Richardville was confident a deal will be in place before school begins.

officials are hopeful that the state will reform the system. In May, the board passed a resolution urging reform of the system.

Thursday Superintendent Scot Graden said that while the district has achieved savings through its new contracts with the and , pension reform is a critical issue.

“Even with the concessions and savings realized in the contracts, we still have a ,” Graden said.

That state requires school district to fund the pension system by paying a percentage of its wages—known as the MPSERS rate—back to the state. That rate, which was as low as 13 in 2003-04, has risen steadily. It was at 24.46 last year and is set to rise to 27.27 in 2012-13 unless there is reform.

That’s about $800,000 for Saline Area Schools.

The district has budgeted for the higher rate. The rate is expected to jump to 31 in 2013-14 without reform, costing the district another $1 million annually, according to Graden.

“If it the state fails to act, that’s close to $2 million a year that we’ll have to make up by reducing programs and services,” Graden said. “As a citizen, I’d like to see something that indicates the senate understands the impact this has on our schools.”

At a school board meeting earlier this year, the state’s pension plan was underfunded by $45 billion.

 

SCOOBYDOO July 20, 2012 at 01:54 AM
And the students,parents and taxpayers continue to get screwed by the unions and the politicians, thanks all !
Kelly Driscoll Saiyacork July 20, 2012 at 01:00 PM
A $45 Billion deficit is unthinkable. It is time to find additional sources to fund the state pensions beyond local school district funding. I urge everyone to learn more about the candidates running for the MI house & senate this year. Please vote for those candidates who realize that education is a top priority for our state. We must have representatives who will work together to write fiscally sound laws. Education & Sound Economics cannot be separated.
Freedom 2012 July 20, 2012 at 09:32 PM
Here is a novel suggestion about "additional sources": how about the people who are the beneficiaries funding their own pensions?
Dawn Ducca July 23, 2012 at 09:45 PM
Voting is absolutely a great idea, but we can't wait until November on this issue. We all need to contact our legislatures and urge them to work together and get a GOOD bill passed, that will not only guarantee a good retirement for our teachers, BUT will still provide a quality education to our students.. Stop the finger pointing of which party did or didn't do something and work together to fix this issue!! If we all contact our legislatures, they will have to act NOW!!

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