5 questions raised by new pension laws set to be signed by Governor Snyder on Tuesday
While new legislation regarding school employee pension reform is set to be signed into law by Gov. Rick Snyder on Tuesday, MLive’s Dave Murray reports that the new rules raise some interesting questions.
Signing the new pension guidelines into law still leaves options in the table for Rick Snyder
According to Murray, ongoing court cases could be affected by the new laws, including a case decided by an appeals court that threw into jeopardy the fate of $508 million collected from teachers. That money is currently sitting in escrow, and the governor wants it to be returned to the employees.
Click here to Read the full article on MLive.com
Ben Freed covers business for AnnArbor.com. Reach him at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2
Comments
Alpha Alpha
Thu, Sep 6, 2012 : 3:01 a.m.
Are there any studies showing an association between educator compensation and student educational outcome?
Tom Todd
Tue, Sep 4, 2012 : 11:55 p.m.
Are we going to Bash the Police tomorrow,Because anyone could do that job too,Right?
DonBee
Wed, Sep 5, 2012 : 12:37 a.m.
Tom Todd - Who is bashing? Facts are facts, and the fact is the pension fund is underfunded and it is not taking enough money in to cover the annual benefit costs. I don't want to see the state pension system bankrupt. We need a way to fix the problem. Governor Granholm did not do you any favors by not putting ANY money in the pension system over the 8 years she was in Lansing. The 3 percent issue started under Governor Granholm as well. Everyone needs to think long and hard about how we fix this, it is a big (and getting bigger) problem.
Gloria
Tue, Sep 4, 2012 : 9:25 p.m.
Bottom line, Snyder has done nothing positive for teachers or education. He is out to "bust" teachers unions and do away with public education. This is all about money and the money IS NOT going into teachers pockets. Many teachers have two jobs to pay their bills. What's the average salary of people in the private sector who have a masters degree????? I guarantee it's a heck of a lot more than a public school teacher. As far as pensions, many teachers have worked more than 20 years with the promise of a full pension. You can't change the rules in the middle of the game. VOTE DEMOCRATIC!!!!!!!!!!!!!!!!
Tom Todd
Tue, Sep 4, 2012 : 11:49 p.m.
Keep up the Good fight Gloria some people went to fords some others COLLEGE.
SEC Fan
Tue, Sep 4, 2012 : 11:01 p.m.
you say that as if it were a bad thing...
Ralph
Tue, Sep 4, 2012 : 8:05 p.m.
Na, Na Na, Na Na!! Enjoying my great government pension and FREE premium health care too!!!!
DonBee
Wed, Sep 5, 2012 : 12:33 a.m.
Ralph - I hope it is there for you in a few years - right now benefits exceed income for the Michigan State pension funds by over $700 million a year. Given rate of increase in benefit payout it will top a billion by 2014 and and 1.5 billion in 2016. In short the fund will be dry by 2021 or so.
Tom Todd
Tue, Sep 4, 2012 : 11:48 p.m.
or Harry?
Tom Todd
Tue, Sep 4, 2012 : 11:47 p.m.
YOU EARNED IT! GOOD for you!!!,bob probably fell over
harry
Tue, Sep 4, 2012 : 8:58 p.m.
Not for too long eh Ralph. Actually you are in worse situation than the current workers. At least they can plan for the future. You cant.
Basic Bob
Tue, Sep 4, 2012 : 6:19 p.m.
Once again we discover how poorly Engler and Granholm ran the state. Granholm Illegally took retirement money from teachers checks which promised to do nothing for the people paying, and yet not enough to solve the problem. Destined for court and a rewrite. Some friend the teachers union had.
DonBee
Tue, Sep 4, 2012 : 7:23 p.m.
The money is in escrow. What will happen to it is the subject of legal proceedings.
Angry Moderate
Tue, Sep 4, 2012 : 6:28 p.m.
Don't confuse the union thugs with facts.
Chris
Tue, Sep 4, 2012 : 6 p.m.
Why wasn't this change put in place for state of Michigan employees too?
DonBee
Wed, Sep 5, 2012 : 12:31 a.m.
Tom Todd - I am on a 401K, like almost every non-union employee in the US that is in the private sector. Why are you asking?
harry
Tue, Sep 4, 2012 : 8:55 p.m.
Tom What does that have to do with anything. If a private company wants to give everyone $100 per hour then they can. They are PRIVATE. Its nobody's business. When you pay with my(our) taxes I have a right to comment.
Tom Todd
Tue, Sep 4, 2012 : 7:35 p.m.
how about people who do your profession?
DonBee
Tue, Sep 4, 2012 : 7:21 p.m.
If you are becoming a new State Employee you get the government equivalent of a 401K. There is no pension system for new State employees, and there has not been for several years.
Jay Thomas
Tue, Sep 4, 2012 : 5:58 p.m.
There are some physically demanding professions in the public sector that are not so easily done by a sixty year old. Patrol man, firefighter, etc. Being a teacher is not one of them! Why are so many University professors teaching for as long as they can... while k-12 teachers NEED to retire in their 50's?
Tom Todd
Tue, Sep 4, 2012 : 11:45 p.m.
Don't buy the lie.
ekimecir
Tue, Sep 4, 2012 : 5:45 p.m.
When a teacher retires at age 52 do they begin to collect pension benefits at that time or are the delayed until a later age?
willowrunistillcare
Wed, Sep 5, 2012 : 5:09 p.m.
Yes they can begin to collect at that age if they have 30 years of service, but at a lower rate than had they waited until age 62.
DonBee
Tue, Sep 4, 2012 : 7:20 p.m.
Right away for retirement, and health benefits.
andy kelly
Tue, Sep 4, 2012 : 5:40 p.m.
I have thought long and hard about this very issue for years and yet I still do not understand why so many people are upset with the possibility of paying teachers a handsome wage and great benefits. Matter of fact, in a society of compassion and progressive possibility, I think that the starting pay for a teacher needs to be much higher with impeccable healthcare and a very generous retirement. This new way forward would require teachers to be more qualified and thoroughly invested in their districts upon hire. Teachers, not administrators, would lead the district and eradicate the excess. Teachers would be required to dedicate at least 35 years of service and in return receive a paid one year sabbatical every 5 years. It would be an great honor to be a teacher in this kind of society of progressive possibility. It would carry respect and demand the brightest and best become teachers. Of course, this way forward would also enable the best possible outcome for students. I know that this is a pipe dream, since any kind of logical solution for saving our society is thrust aside in favor of the absurd and idiotic.
DonBee
Wed, Sep 5, 2012 : 12:30 a.m.
andy kelly - I don't mind paying a good wage, I don't mind benefits. But since 1979, the year the law was written the social security retirement age has increased from 65 to 72 for new college graduates, and the teachers pension requirements have not changed. That means people are living longer (the life expectancy for has risen by 4 years) and so we need figure out how to pay for these benefits. Additionally Governor Granholm decided she did not have to put any money in the retirement funds for the WHOLE 8 years she was in office - leaving the state with a $43 billion dollar unfunded liability. Check this out: http://www.michigan.gov/documents/orsschools/Public_Schools-2011_CAFR_375806_7.pdf We need to figure out how to fill this hole. It is equal to a full year of revenue from all sources for the state government.
Tom Todd
Tue, Sep 4, 2012 : 11:44 p.m.
Bob we are talking about TEACHERS not free loaders in society yes it's a BIG issue for another story.
GoNavy
Tue, Sep 4, 2012 : 6:55 p.m.
In Singapore, the top 10% of graduates become teachers. In the U.S., it's much closer to the opposite. I have no problem rewarding the former, BTW.
Basic Bob
Tue, Sep 4, 2012 : 6:29 p.m.
It's unrealistic unless we have vast numbers of people paying taxes beyond the benefit they receive in other government services. Some want free housing and food stamps, others want a cop on every corner. Some want lifetime benefits for unmarried partners, others want to be able to press a button and safely blow up all the communists, dictators, racists, and religious fanatics. All of these things cost money and as a society we need to agree what we are willing to support.
Tom Todd
Tue, Sep 4, 2012 : 5:12 p.m.
everyone is jealous of the teachers! go to College,get and Education,become a Teacher( low starting salary) and then teach children. if everyone could do it, that would be one thing not everyone can.now the middle class is fighting amongst each other for scraps! when no one can retire anymore/or earn a pension will you be happy! how is that 401k doing not so good!it's pie in the sky junk science!money for the wealthy to squander on the stock market. it IS a race to the bottom!! there should be some solutions, not oh well I don't GET IT you can't either, wow some country we now live in. maybe all college grads should make no more then $20 dollars an hour and high grads make $8.25 an hour would that work for you oops forgot benefits that's right, you at your job receive none I guess others can't earn any either, well then welcome to communist china or middle class ware fare bidding done for the rich to start businesses ripping the schools off to gain profits for the rich this does not benefit the community YOU live in, your housing values or lower crime in the area but hey as long as your not jealous of your neighbor because he or she does not earn more or have better life then you who cares about crime/schools/housing values and a middle class?
harry
Tue, Sep 4, 2012 : 8:53 p.m.
That is the biggest and longest run on sentence I have ever seen.
GoNavy
Tue, Sep 4, 2012 : 8:48 p.m.
@Semper Fi: One does not need to have cancer to be an oncologist, so to speak...so your statement suggesting that we have "no clue unless we've spent time in a classroom" is as misguided as anything else you've said. Certainly the "those who can't, teach" has some grounding in reality. Why else would it enjoy the relevance and persistence it has? Regardless, many of us here work in extremely challenging environments. I don't work with 30 screaming teenagers *because that isn't my professed skillset,* and (more importantly) I'm not *paid to do so.* On the other hand, I readily invite individuals to perform some of the more complex aspects of my job, which at various times might involve financial modelling, programming, writing, and complex analysis of less-than-straightforward concepts. PS I'm under the added pressure that clients can readily judge my work and can easily jump to a competitor if my product is substandard. That's a tough gun to work under -
Tom Todd
Tue, Sep 4, 2012 : 7:34 p.m.
NOT A TEACHER JUST looking out for THE MIDDLE CLASS and against the haters
SemperFi
Tue, Sep 4, 2012 : 7:32 p.m.
"Those who can't, teach." is simple minded and condescending. It is also espoused by those who don't have a clue about educating youth. Folks that use this phrase and complain about teachers have never experienced a classroom from a teacher's perspective. Try to spend more than a few minutes trying to keep the attention of 30 teenagers and get a single point across to them. I doubt that you can even do it with one teenager for more than 10 minutes.
GoNavy
Tue, Sep 4, 2012 : 6:54 p.m.
One must attend college in order to learn how to be good with children? The credentials-based teaching culture is as flimsy a system as you can get. Credentials mean little without corresponding results. Some of the most inept practitioners of any art are those who are most "credentialed" in its practice...hence the phrase: "Those who can't, teach."
Jay Thomas
Tue, Sep 4, 2012 : 5:54 p.m.
"go to College,get and Education," Really? :)
andy kelly
Tue, Sep 4, 2012 : 5:26 p.m.
While I would like to agree with some of your points your rambling takes the punch away from your argument. It just sounds like anger, which is not helpful in proving your thesis. Sorry, did I just sound too much like a teacher?
harry
Tue, Sep 4, 2012 : 2:15 p.m.
Finally there is some common sense in our government. Why would the citizens pay for a teacher to retire as early as 52 years old with health care and pension. This is not the norm in the private why should it be in the public sector.
DonBee
Wed, Sep 5, 2012 : 12:21 a.m.
glacialerratic - In the military it is almost impossible, unless you are in Special Forces to make 0-6 in twenty years, the promotion path is too full. But, since you asked for it. An 0-6 (Navy Captain, Army Bird Colonel) makes $107,256 annually so their pension at 40 percent would be $42,902. Still less than a teacher makes just off the straight salary in pension. This is still below what an AAPS teacher would make. Again the original comparison was between someone who could retire at 38 out of the military and the most common rank vs a teacher at the most common level for retirement. I hope this comparison satisfies you, remember an 0-6 will be at LEAST 4 year older than the 38, and in most cases closer to 8 years older (5 for college and 3 to actually make grade - based on published promotion intervals by the military).
glacialerratic
Tue, Sep 4, 2012 : 10:52 p.m.
Sorry, DonBee, I don't think the average Ann Arbor teacher retiring after 20 years has a PhD. Those that do are at the upper end of compensation. A more apt comparison would not be an E-7, but an officer at the rank of colonel or naval commander or captain.
harry
Tue, Sep 4, 2012 : 8:50 p.m.
Todd It has nothing to do with jealousy it has to do with how my tax dollar are spent. The teachers union has been too strong and our government has been too weak way too long. Teachers deserve fair wage and benefits. Spending my tax dollars on allowing them to retire as early as 52 with health and pension is not a good use of MY tax dollars.
DonBee
Tue, Sep 4, 2012 : 7:18 p.m.
glacialerratic - In both cases it is the most common retirement at that age/time. This is based a available statistics from the Veterans Bureau for the military and the State of Michigan for the teachers.
johnnya2
Tue, Sep 4, 2012 : 6:17 p.m.
So what? They made an AGREEMENT with the district to work for a specified amount in exchange for the chance to retire at specified times. NOW, the right wingers want to change the agreement. This was a contract, plain and simple. You can not change a current retirees contract AFTER the fact. Unless of course the right wing decides they want to give more tax cuts to businesses that created no jobs in 2012 michigan unemployed January 2012 417,221 July 2012 421,255 Four thousand MORE unemployed now than in January. Good work Rick, those "job creators" are cranking it up.
Tom Todd
Tue, Sep 4, 2012 : 5:15 p.m.
Jealous much "harry"
glacialerratic
Tue, Sep 4, 2012 : 5:13 p.m.
I'm not sure I understand the justification for using as a basis of comparison a teacher with a PhD, on the one hand, and a person who retires with the rank equivalent to Chief Petty Officer or Sergeant First Class, on the other, for concluding that a "BIG BIG" difference exists between pensions and related retirement benefits for teachers as compared with military personnel.
DonBee
Tue, Sep 4, 2012 : 3:19 p.m.
Kmgeb2000 - Yes, you can retire from the military at 38, if you joined at 18 and were enlisted, and did 20 years of service. What do you get? 40 percent of base pay - which today base pay is about 1/2 of what a typical military person makes - the rest is in allowances for quarters, food, uniforms, and in special pays for specialties, location and hazards (e.g. combat pay). So at 38, what you are really getting is about 20 percent of what you made in the military. It does require you to get another job to life. If you do all the right things in the right order, you can retire from teaching in Michigan at 47, only 9 years later than retiring from the military and you get more than 60 percent of your pay in retirement benefits. There is no "base pay" equivalent, so every dollar that goes on the check is used to compute your retirement. The average pay for an E-7 at 20 years (about the right level for most retirees) $50,500 or a retirement of roughly $20,000 a year. The average pay for a AAPS teacher with a PhD at 20 years? $87,128 or a retirement of more than $52,000 - more than the military person was making on active duty. If you were a coach, a circulum coordinator, or had other duties that added to your pay over your high 3 years - it adds to your retirement. There is a BIG difference between military retirement and teacher retirement. A BIG, BIG difference.
harry
Tue, Sep 4, 2012 : 3:08 p.m.
kmgeb2000 I never said that military pension were ok. This is about teachers. I would say they should retire with the rest of society. That is if you have enough money save you can retire at any time. Medical and pensions are not sustainable. They should live like everyone else. Save in your 401K and retire when ever you want to.
Bcar
Tue, Sep 4, 2012 : 3:05 p.m.
@kmgeb2000, bec they PUT THEIR LIFE ON THE LINE!! And they dont get full pension/medical when they leave at an early age, it is reduced significantly before min retirement age/MRA.
Jonny Spirit
Tue, Sep 4, 2012 : 2:33 p.m.
Go be a teacher harry! Stop your complaining !
kmgeb2000
Tue, Sep 4, 2012 : 2:32 p.m.
But why is it "OK" for a 38 year old to retire from the military with a pension and full medical, both delivering immediately upon retirement from military service (regardless of active combat history)? Harry, when would you "allow" them to retire - 55, 60, 65, 70? Is 30 years of service teaching kids enough?
Tom Todd
Tue, Sep 4, 2012 : 11:29 a.m.
it's a race to the bottom!
DonBee
Tue, Sep 4, 2012 : 3:25 p.m.
Ok - Tom Todd - Where do we come up with the $43 billion we already owe at the state level in retirement funds (this is the level of underfunding). OBTW - that $43 billion is what it takes to run all of the state budget for a year. We can try doubling all the taxes for a couple years for everyone - gas taxes, cable fees, telephone fees, license plate fees, income taxes, the portion of property tax that goes to the basic grant to schools, etc. Since the state budget includes income from more than just taxes, it would take 2 or 3 years of these higher tax rates. Sounds good right? Oh, and we would have to maintain some taxes at a higher level to continue to fill in the gap in the future. Oh, and if the new rules for computing the return on a retirement fund go thru, the rate of return used to compute the underfunding will go from 8 percent to 5 percent and the under funding will almost double - so how about 10 years of double taxes? Makes great sense to me, doesn't it to you? I don't think many people are going to be interested in doubling their tax rates to cover retirement promises.
harry
Tue, Sep 4, 2012 : 2:21 p.m.
Common sense says that this is unsustainable. How about if we raise your taxes to 40% so we can keep teachers being able to retire as early as 52 with pension and health care. I am sure you would have no problem with that right?
GoNavy
Tue, Sep 4, 2012 : 2:20 p.m.
Race to the bottom? Far from it. Every dollar not spent on benefits is a dollar that's either not taken from taxpayers, or (hopefully) spent on actually educating children. If you dive into the subject, you'll learn that many industries count personnel costs as between 60 and 70% of net profits (revenues I suppose in terms of schools). Keeping these numbers within rational bounds ensures that no one party takes too much of the overall pie for themselves. There's no reason that the state needs to be engaging in lifetime promises to workers regarding their healthcare or retirement. Considering that, once on the books, these arrangements are ripe for exploitation, it should be no surprise that these promises are now consuming far more than anybody ever intended them to consume. Educators' salaries should be negotiated in public, with known guidelines and terms, free from the sort of back-room meddling that can turn a reasonable series of benefits into an unsustainable entitlement program. Anything short of that is the theft of education dollars from students and taxpayers alike.
bobslowson
Tue, Sep 4, 2012 : 12:14 p.m.
And I think we are winning!