MPSERS Reform Heads To Conference Committee as Senate Deadlocks
After nearly seven hours of session, two caucuses, and multiple recesses, Senate Republicans still fell short on passing any version of SB 1040, the Michigan Public School Employee Retirement System (MPSERS) reform bill.
The House waited until nearly 7:00pm for some kind of legislation to come out of the Senate, but nothing came. In the end, the Senate voted to send the bill to conference committee where designees from both the House and Senate will meet over the next month to try and hammer out a compromise bill that can garner enough votes to pass. Both chambers return to session August 15, which would be the next chance to attempt passage of the bill.
The crux of the debate is the insistence of some Senators to end the pension system for new employees and convert them completely to a defined contribution (DC) system in order to reduce the state’s long-term financial liability. In contrast, Governor Snyder and the House want to pre-fund the retiree health care system in order to improve the state’s bond rating and maintain the current hybrid pension plan since it is cheaper than DC.
Senators Phil Pavlov (R-St. Clair Twp.) and Mark Jansen (R-Grand Rapids) unveiled yet another proposal on Wednesday that they claimed would both prefund health care and convert to a DC system. However, no fiscal agency analysis of the bill was available to show whether the funding in the proposal was sufficient and the proposal was never put up for a vote because it lacked sufficient support.
This latest delay leaves school employees and districts once again in limbo while lawmakers head back to their districts to continue campaigning. Without action the MPSERS rate is scheduled to increase to 27.37% this fall and 31.21% in 2013.