2007 Senate Bill 689 (State employment early retirement )

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Introduced by Sen. Mike Bishop (R) on August 22, 2007, to increase the pension benefits of state employees whose age and years of employment add up to at least 75 and who retire between Nov. 1, 2007 and Dec. 31, 2007 (or later for some employees). The bill would increase the multiplier used to calculate the retirement benefits of these employees from 1.5 percent to 1.75 percent, which would increase the cash portion of their pension benefits by 16.7 percent. Reportedly, some 14,000 of 52,000 current state employees would be eligible, and the plan would be to realize budget savings by only replacing 25 percent of them. See also Senate Bill 691.
- Referred to the Senate Appropriations Committee on August 22, 2007.
  - Reported in the Senate on August 30, 2007, with the recommendation that the substitute (S-1) be adopted and that the bill then pass.
- Substitute offered in the Senate on August 30, 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. The substitute passed in the Senate by voice vote on August 30, 2007.
Passed in the Senate (21 to 16) on August 30, 2007, to increase the pension benefits of state employees whose age and years of employment add up to at least 75 and who retire between Nov. 1, 2007 and Dec. 31, 2007 (or later for some employees). The bill would increase the multiplier used to calculate the retirement benefits of these employees from 1.5 percent to 1.75 percent, which would increase the cash portion of their pension benefits by 16.7 percent. [Vote Details and Comments]
Received in the House on August 30, 2007.
- Referred to the House Government Operations Committee on August 30, 2007.

Most Recent Comments

1) Re: 2007 Senate Bill 689 (State employment early retirement ) [by AdolfoM on May 4, 2009]

Although the government is doing the best they could to improve
the retirement bill, a recent Gallup
poll revealed that most people aren't confident about retirement and a lot of
retirees aren't either. There's no cash
advance loan big enough to fix Social Security at present, and you can't depend
on a quick payday loan to securely be able to enter into retirement.
Retirement is something we all should have on our minds. It may be an early
retirement or you reached the maximum age for working people. However, the old model of retirement is on the way out,
as hardly any companies offer pensions and those not about to retire in the
next ten years won't be able to depend on Social Security realistically.

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2) EARLY-OUT NOW [by Anonymous Citizen on September 11, 2008]
There was news this week of the Legislature discussing early-out legislation.

"Rep. Rick Jones (R-Grand Ledge) said in the Maxey case, workers are dealing
with violent offenders and he understood the need for a carve-out. But he
urged the committee to not continue that pattern and instead approve a bill
that provides an early out option for all state employees.

He said that would allow older employees who want to leave the ability to do
so while at the same time hiring younger employees and keeping that talent in
Michigan.

The idea of an early out for all state employees has been kicked around for
some time, particularly with the state in a budget crunch. But no
legislation has made it to Governor Jennifer Granholm's desk. The governor
does not support an early out program for all state employees because of the
lingering brain drain effects the last early out program had."

Question: Who keeps saying the Governor does not support an early out program
because of a brain drain perception?

1) it's been over 6 years since the last early-out. Certainly, one would hope,
that any necessary positions would have been filled by now.
2) This is a natural order of workforce development. People retire and then
you replace them, if necessary.
3) Has the Governor considered the "brain drain" that happens to an employee
after over 30 years of service? Morale, ambition, enthusiasm, career motivated
- these are all typical declining factors that should be considered.
4) Only a fraction of the state workforce would be able to retire. The
remaining "brains" should be able to educate the new highly educated, highly
qualified and extremely motivated replacement employees.
5) These senior employees will have to be replaced sooner or later, so why
would we wait? There is a large and growing state population searching for
long-term career employment. Take advantage of the large hiring pool and give
some of them a job.

Consider the following questions with replacing a senior state employee with a
new state employee.
1) Would this be considerably cheaper? (Might not need to fill the vacating
possibly obsolete position (reorganization?), lowered salary, lower pension
costs, possibly lowered health care).
We need to save anyway possible. If not for the current budget, then certainly
for the rainy day fund.
2) Would the new employee have newer 21st century education training and
skills?
3) Would the new employee be more career-driven?
4) Would the new employee have more ambition, enthusiasm, morale?

Please pass these ideas to the Governor, if possible. I was hoping for more
action from this office, since most early-outs have resulted from an executive
order from the Governor. At least, if the Governor is for early-out, then send
a message to the Legislature to get it done.

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3) Contact Governor or your legislator [by Anonymous Citizen on August 19, 2008]
Recently received from the Governors Office:

"Thank you for contacting Governor Granholm to share your suggestion to institute an early out retirement incentive to state employees as a way of reducing state funding and stimulating job growth. The Governor is always pleased to hear from fellow state employees on how we might make public service with the State of Michigan a great place to work. I will be sure to share your thoughts with the Governor so she may keep them in mind as she continues to address state employee issues or should legislation on this issue be presented to her for signature.

Again, thank you for contacting our office on this important issue."

Issue Specialist

Constituent Services Division

Office of Jennifer M. Granholm

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