MPSERS Update

Bob Kefgen's picture

Last week, we walked through the pre-Lame Duck rumors about a possible MPSERS reform bill. This past Wednesday, the Senate Appropriations Committee reported out a three bill package that would close the MPSERS pension system for new hires and instead move them into a 401k-style system. Those bills are now awaiting a vote on the Senate floor, but no vote has yet materialized.

Any legislative debate about changes to the retirement system causes understandable angst, so let's review the politics, the bills (SB 102 and SB 1177-78), and where things stand right now. Here are 5 key takeaways for Principals:

The bills would have no impact on the current or future benefits of school employees who are already in the MPSERS system.

  • MPSERS benefits already earned are guaranteed.
  • MPSERS employees will continue to earn service credit and accrue additional benefits as they continue working.
  • This bill make no changes to retiree health care.

The vote count is TIGHT and it is unclear whether these bill will garner the support necessary to get out of the Senate. The bills passed the Senate Appropriations Committee on a thin 9-8 vote margin and have sat on the Senate floor for two session days without any further action, which seems to suggest that the bills cannot garner the 20 votes necessary to pass. This is significant because the Republicans have a supermajority in the Senate (27 Rs to 11 Ds). If supporters are having trouble getting the bill through the Senate with such a large margin, then it seems likely they will have an even harder time in the House where the gap is even smaller (63 Rs to 47 Ds).

MASSP is watching these bills closely and working to oppose them because—while they may not have an impact on current MPSERS members—the impact to the profession is in question and the impact to schools is known to be negative.

  • As currently written, the bills would raise the cost of employee retirement for every traditional public school in the state.
  • According to the Office of Retirement Services, the change would generate no short or long term savings and would not put another dollar in the classroom.
  • For full details on the potential financial impact to districts and the state, MASA has put together a MPSERS Action Center, with several resources.

So why is this being discussed? Legislators who are championing these bills seem to be doing so largely for philosophical reasons. For example: because they want to reduce long-term risk for the state and shift it to school employees, because they don't believe the state should be in the pension business, etc.

What's next? This situation is very fluid and could change at a moment's notice. There is no telling what is going to happen. Just like in sports, you're not only playing against an opponent, but against the clock and the clock is working against these bills. The last day of legislative session is Dec 15. That said, even if these bills do not pass during lame duck, expect the issue to resurface next year. But it's a harder lift next year as the new legislature also has to balance a budget.