School Pension Reform Stalls in State Senate Again

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.