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 De
Roche Supports Study of Teacher Retiree Benefits
Gongwer New Service, February 16, 2005
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House Speaker
Craig DeRoche (R-Novi) is supporting the necessary funds,
estimated at $2 million to $5 million, that the State Board of
Education wants for a study of the costs associated with the
state's system for paying teacher's pensions and health care
coverage during their retirement.
DeRoche spokesperson Matt Resch said the speaker met with state
board members and was impressed with their resolve to examine
problems in the Michigan Public School Employees Retirement
System. School administrators and school boards have said that
most, if not all, of the $175 per pupil spending increase
recommended by Governor Jennifer Granholm for the 2005-06 fiscal
year will be used to pay for soaring health care and pension
costs, not classroom enhancements.
"He recognizes and knows that the board recognizes some serious
challenges in the costs associated with K-12 education," Mr.
Resch said.
Rep. Brian Palmer (R-Romeo), chair of the House Education
Committee, is planning legislation to address the employment
retirement system, which provides lifetime health care in
addition to a regular pension. The pensions themselves are not
the problem, but the health care benefit is skyrocketing, he
said.
Another problem Mr. Palmer said he wants to target: the vesting
schedule for full retiree coverage. After 10 years, teachers are
fully vested in their coverage, and they can buy full vesting
after five years, he said.
Such vesting schedules add only more burden to an already
overloaded system, he said.
"We've got to do something," he said. "This is quite the
generous system."
But Al Short, lobbyist for the Michigan Education Association,
disputed the contention from school leaders that health care and
retirement costs would eat up most of the $175 per pupil
increase.
The real problem in the retirement system is the state lost
tremendous amounts of money on its stock investments that it
uses to fund teacher pensions, he said.
"I think they're blowing smoke on a lot of this stuff," he said.
That said, Mr. Short said the MEA takes "very seriously" the
upcoming effort on the retirement system and the Michigan
Education Special Services Association that funds current
teacher health care coverage.
"We'll respond and let the legislators know that we don't
support any of their objectives at the present time," he said.
"We're prepared."
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