Michigan government's two largest pension systems offer public sector employees benefits that are out of line with those in Michigan's private sector and are not likely to be affordable long-term, according to a new study published by the Mackinac Center for Public Policy.

The state's two biggest public sector pensions are the Michigan Public School Employees' Retirement System (MPSERS) and the Michigan State Employees' Retirement System. The study's author was Rick Dreyfuss, a Mackinac Center Adjunct Scholar.

Stay Engaged

Receive our weekly emails!

The study found that most private sector companies provide pension benefits only through a 401(k) plan or some other type of "defined contribution" plan.  But MPSERS is a "defined benefit" plan where a retiree gets a predetermined monthly retirement payment typically based on years of service and a multiplier.

The school districts are facing a 6.4 increase to 20.66 percent in payments they make for pension and retirement health care benefits. That increase took effect Oct. 1. That means for every $1 the school districts pay an employee, the district has to kick in 20.66 cents to MPSERS.

The MEA has filed a lawsuit over its employees having to pay an additional 3 percent contribution to MPSERS.

James Hohman, fiscaly policy analyst at the Mackinac Center for Public Policy, said the MEA lawsuit means that schools have to set aside an additional $187  per pupil for teachers' benefits.

"The MEA's lawsuit effectively sends the message that schools don't need an additional $187 per pupil," wrote Michael Van Beek, the Mackinac Center's education policy direction, in an email. "This is a clear instance of the interests of school employees and their unions trumping the interests of parents, students and, ultimately, taxpayers."

~~~~~

See also:

School Pension Reform Stalls in Senate

Breaking News: House Vote Would Force Charter Schools Into Underfunded Pension System

Legislators Link Common-Sense Reforms to Tax Hikes

Focus is on state employee benefits

Why Colorado Matters to Michigan

Stay Engaged

Simply enter your email below to receive our weekly email:

Facebook
Twitter

Detroit Prep is a top-rated and economically and racially diverse charter school in the city. It's growth means it needs to move out from a church basement and into a new location. Nearby is a former Detroit Public Schools building, sitting empty for years. But, worried about competition, the public school district refused to sell. For years, district and local government officials in Detroit had worked to block public charter schools. They pushed legislation at the Michigan Capitol to hinder them, refused to sell to them, transferred surplus buildings from the district to the city government and imposed deed restrictions on property sales to private developers. All of it was aimed to hinder or even prevent charter school choice outside the confines of the Detroit school district.

Related Sites