Public Act 110 of 2007

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• Introduced by Sen. Wayne Kuipers (R) on May 25, 2007, to establish that new school employees would become eligible for partial post-retirement health insurance benefits after 10 years of service, and earn 3 percent of the full benefit for each year on the job. In other words, the individual would first be entitled to 30 percent of the post-retirement health benefit after 10 years on the job, and earn 3 percent for each additional year of service. Under current law, school pension eligibility may be established according to a number of standards, all of which are far less stringent than private sector practice. The benefit would only begin after age 60, but otherwise would be the same as specified under current law, which is 90 percent of the monthly premium for a hospital, medical-surgical, and sick care benefits plan “authorized by the retirement board and the Department of Education.” The bill would only apply to new school employees hired after June 30, 2007. It would also increase the premiums that new employees must pay into an enhanced retirement program that allows earlier retirement with full pension, larger monthly checks, annual benefit increases, and earlier survivor protection (the “Member Investment Program”), and would limit the purchase of “service credits” that allow a school employee to retire early with a full pension, by requiring the employee to actually put in 10 years on the job after purchasing the credits.
  • Referred to the Senate Education Committee on May 25, 2007.
    • Reported in the Senate on May 31, 2007, with the recommendation that the bill pass.
  • Substitute offered in the Senate on June 26, 2007, to replace the previous version of the bill with one that revises details but does not change the substance of the bill as previously described, amended to lower the retiree health care benefit to 90 percent of the cost of insurance for certain retirees in the future. The substitute passed in the Senate by voice vote on June 26, 2007.
• Passed in the Senate (20 to 18) on June 26, 2007, to establish a “graduated” school employees pension and post-retirement health care benefits vesting system, where the amount of pension and benefits a school employee receives is tied more directly to the number of years worked; and also require employees to contribute more of their salaries to the system. Under current law an employee who has only worked for 10 years (or five in some cases) can be eligible for a full pension and benefits. [Vote Details and Comments]
• Received in the House on June 26, 2007.
  • Referred to the House Education Committee on June 26, 2007.
  • Substitute offered by Rep. Steve Tobocman (D) on September 30, 2007, to replace the previous version of the bill with one that requires school districts to give slightly more to employees, and is tie-barred to Houses Bills 5194 and 5198, tax hikes that total $1.5 billion. The substitute passed in the House by voice vote on September 30, 2007.
• Failed in the House (50 to 59) on September 30, 2007, to establish a “graduated” school employees pension and post-retirement health care benefits vesting system, where the amount of pension and benefits a school employee receives is tied more directly to the number of years worked; and also require employees to contribute more of their salaries to the system. Under current law an employee who has only worked for 10 years (or five in some cases) can be eligible for a full pension and benefits. [Vote Details and Comments]
• Moved to reconsider by Rep. Steve Tobocman (D) on September 30, 2007, to reconsider the vote by which the House did not pass the bill. Passed in the House by voice vote on September 30, 2007.
• Received in the House on October 1, 2007.
  • Substitute offered by Rep. Steve Tobocman (D) on October 1, 2007, to replace the previous version of the bill with one that requires school districts to give slightly more to employees. The substitute passed in the House by voice vote on October 1, 2007.
  • Amendment offered by Rep. Steve Tobocman (D) on October 1, 2007, to increase the proposed employer contribution to an employee's post retirement health care benefits, and make employees eligible after fewer years of service than proposed in the previous versions of the bill. The amendment passed in the House by voice vote on October 1, 2007.
  • Amendment offered by Rep. Steve Tobocman (D) on October 1, 2007, to establish that the bill only takes effect after the associated tax increases do. The amendment passed in the House by voice vote on October 1, 2007.
• Passed in the House (65 to 44) on October 1, 2007, to establish a “graduated” school employees pension and post-retirement health care benefits vesting system, where the amount of pension and benefits a school employee receives is tied more directly to the number of years worked; and also require employees to contribute more of their salaries to the system. Under current law an employee who has only worked for 10 years (or five in some cases) can be eligible for a full pension and benefits. Passage of the bill occurred as part of a deal to avoid reducing state spending in the 2007-2008 Fiscal Year by imposing $1.5 billion in tax increases, including an increase in the state income tax from 3.9 percent to 4.35 percent (House Bill 5194) and imposing a 6 percent tax on many personal and business services (House Bill 5198). [Vote Details and Comments]
• Received in the Senate on October 1, 2007, to concur with the House-passed version of the bill, which requires school districts to give slightly more to employees, and is tie-barred to Houses Bills 5194 and 5198, tax hikes that total $1.5 billion. Passed in the Senate (23 to 15) on October 1, 2007. [Vote Details and Comments]
• Signed by Gov. Jennifer Granholm on October 1, 2007.