Senate Hearing on MPSERS Reform Draws Massive Crowd

The Senate Appropriations Retirement Subcommittee took its first public testimony on SB 1040, the proposed MPSERS reform bill, last week. The multi-hour hearing was standing room only as well over 200 people from as far away from the UP packed the hearing room while protesters marched on the street outside the building.

The Subcommittee began by hearing testimony from Phil Stoddard, Director of the Office of Retirement Services, who outlined the significant financial challenges facing the MPSERS system in the coming decade. Stoddard told the Subcommittee that the bill is estimated to save $260 million in pension costs in year one and about $120 million in retiree health care costs. However, when pressed about whether inaction would cause significant harm to the MPSERS system, Stoddard would not commit.

After Stoddard, testimony quickly turned to the impact that this proposal would have on current and future retirees as person after person spoke to the problems this proposal would create for those who are already retired or are nearing retirement. The Subcommittee heard from teachers, administrators, paraprofessionals, and other school employees from areas across the state.

While some spoke in favor of the proposal, or pieces of the proposal, the vast majority were opposed. Most speakers touched in some form or fashion on the issue of fairness and the difficulty of changing the terms of retirement for educators who are late in their careers or already retired. Specifically, the proposal to raise the eligibility age for retiree health care to 60 received the greatest amount of negative attention.

For their part, Subcommittee members returned repeatedly to the cost to the education system for inaction, the need for change, and comparisons between public and private sector retirement benefits.

After a break for lunch, committee members heard from the long-time former Senate Fiscal Agency director Gary Olsen who brought up several issues with the legislation during his 90-minute testimony including the potential unconstitutionality of the proposed changes.

Subcommittee chair Mark Jansen (R-Gaines Township) would not commit to a firm timeline for moving the legislation, but indicated that it was his intent to run it concurrently with the FY 2012-13 budget bills because of its significant financial impact. The next hearing on the bill is scheduled for this Thursday, April 19 from 8:30 a.m. to 10:00 a.m. at the Capitol Building.