Michigan lawmakers say they’re still trying to reach school employee retirement deal

Lawmakers still trying for school retirement deal

LANSING, Mich. — Michigan lawmakers said Thursday that a potential money-saving plan aimed at coaxing thousands of public school employees into retirement this summer hasn’t yet failed.

Negotiators from the Republican-led Senate and Democrat-run House did not manage to agree on a compromise retirement plan before the Legislature adjourned for the day. That means the earliest a plan could be voted on is next week.

Some lawmakers are worried they’re running out of time to complete a plan that’s worthwhile for teachers and administrators contemplating retirement after this school year. Democratic Gov. Jennifer Granholm had wanted the legislation passed by April 1.

And some school groups say wrapping up a deal next week would be too late to handle the complications that would arise with changing the multiplier used to calculate pension benefits for retirees. School employee groups say delays in adopting the plan have caused confusion for workers.

Granholm is working with lawmakers in an attempt to salvage the plan.

“It would be easy to declare it dead and walk away from it, but we would like to preserve a major reform,” Republican Senate Majority Leader Mike Bishop said late Thursday. “We would like to get it done, and there’s no reason why it shouldn’t be done.”

Supporters of the plan would like to save at least $400 million for schools in the fiscal year that starts Oct. 1. That would offset expected cuts in state aid that go to schools on a per-student basis.

The savings could come by enticing older, higher-paid employees to retire with slightly better pension benefits. Schools might then avoid layoffs or replace departing teachers with lower-paid, younger staff members.

The plan calls for remaining school employees to contribute 3 percent of their salaries to pension or retiree health care plans. That would save school districts money by shifting costs to administrators and teachers.

Democratic lawmakers say school employees should get something in return for having more of their wages eaten up by retirement and health care costs.

“These are the people that are paying for this reform,” Sen. Mike Prusi, the Senate’s top-ranked Democrat, said of school employees.

Republicans have opposed language backed by Democrats that the GOP says could guarantee lifetime health care benefits for school retirees.

Republicans say they have made their last, best offer to Democrats on the proposal.

Roughly 39,000 school employees already are eligible to retire statewide this summer. Lawmakers have considered plans that would make more than 50,000 employees eligible for retirement.

The school retirement legislation is Senate Bill 1227.