Passed 63 to 45 in the House on November 3, 2011, to eliminate the current “defined benefit” post-retirement health insurance system for new state employees, and instead offer a “defined contribution” Health Reimbursement Account (HRA), with the state matching an employee’s deposits up to 2 percent of salary, plus an annual lump sum contribution. Employees hired since 1997 could choose to switch to this system and get a lump-sum contribution of the value of benefits they had already earned.
Also, to require state employees hired before 1997 to contribute 4 percent toward their traditional “defined benefit” pensions, or else have their benefit levels “frozen” at the current level, with the state instead making contributions going forward into an employee’s 401(k) account. The bill would also exclude overtime pay from the basis on which the older employees' conventional pension benefits are calculated, and cancel a 3 percent pension contribution required from all employees under a 2010 law.
View All of House Bill 4701: History, Amendments & Comments
The vote was 63 in favor, 45 against, and 1 not voting.
(House Roll Call 455)
Transition state employees to defined contribution retirement health benefit
|Agema (R)||Bolger (R)||Bumstead (R)||Callton (R)||Cotter (R)|
|Crawford (R)||Daley (R)||Damrow (R)||Denby (R)||Farrington (R)|
|Forlini (R)||Foster (R)||Franz (R)||Genetski (R)||Gilbert (R)|
|Glardon (R)||Goike (R)||Haines (R)||Haveman (R)||Heise (R)|
|Hooker (R)||Horn (R)||Hughes (R)||Huuki (R)||Jacobsen (R)|
|Jenkins (R)||Johnson (R)||Knollenberg (R)||Kowall (R)||Kurtz (R)|
|LaFontaine (R)||Lori (R)||Lund (R)||Lyons (R)||MacGregor (R)|
|MacMaster (R)||McBroom (R)||McMillin (R)||Moss (R)||Muxlow (R)|
|Nesbitt (R)||O'Brien (R)||Olson (R)||Opsommer (R)||Ouimet (R)|
|Outman (R)||Pettalia (R)||Poleski (R)||Potvin (R)||Price (R)|
|Pscholka (R)||Rendon (R)||Rogers (R)||Schmidt, W. (R)||Scott (R)|
|Shaughnessy (R)||Shirkey (R)||Somerville (R)||Stamas (R)||Tyler (R)|
|Walsh (R)||Yonker (R)||Zorn (R)|
|Ananich (D)||Barnett (D)||Bauer (D)||Bledsoe (D)||Brown (D)|
|Brunner (D)||Byrum (D)||Cavanagh (D)||Clemente (D)||Constan (D)|
|Darany (D)||Dillon (D)||Durhal (D)||Geiss (D)||Hammel (D)|
|Haugh (D)||Hobbs (D)||Hovey-Wright (D)||Howze (D)||Irwin (D)|
|Jackson (D)||Kandrevas (D)||Lane (D)||LeBlanc (D)||Lindberg (D)|
|Lipton (D)||Liss (D)||McCann (D)||Meadows (D)||Nathan (D)|
|Oakes (D)||Olumba (D)||Rutledge (D)||Santana (D)||Schmidt, R. (D)|
|Segal (D)||Slavens (D)||Smiley (D)||Stanley (D)||Stapleton (D)|
|Switalski (D)||Talabi (D)||Tlaib (D)||Townsend (D)||Womack (D)|
HOUSE LEGISLATORS WHO DID NOT VOTE
HOUSE LEGISLATORS ALL VOTES
|Y Agema (R)||n Ananich (D)||n Barnett (D)||n Bauer (D)||n Bledsoe (D)|
|Y Bolger (R)||n Brown (D)||n Brunner (D)||Y Bumstead (R)||n Byrum (D)|
|Y Callton (R)||n Cavanagh (D)||n Clemente (D)||n Constan (D)||Y Cotter (R)|
|Y Crawford (R)||Y Daley (R)||Y Damrow (R)||n Darany (D)||Y Denby (R)|
|n Dillon (D)||n Durhal (D)||Y Farrington (R)||Y Forlini (R)||Y Foster (R)|
|Y Franz (R)||n Geiss (D)||Y Genetski (R)||Y Gilbert (R)||Y Glardon (R)|
|Y Goike (R)||Y Haines (R)||n Hammel (D)||n Haugh (D)||Y Haveman (R)|
|Y Heise (R)||n Hobbs (D)||Y Hooker (R)||Y Horn (R)||n Hovey-Wright (D)|
|n Howze (D)||Y Hughes (R)||Y Huuki (R)||n Irwin (D)||n Jackson (D)|
|Y Jacobsen (R)||Y Jenkins (R)||Y Johnson (R)||n Kandrevas (D)||Y Knollenberg (R)|
|Y Kowall (R)||Y Kurtz (R)||Y LaFontaine (R)||n Lane (D)||n LeBlanc (D)|
|n Lindberg (D)||n Lipton (D)||n Liss (D)||Y Lori (R)||Y Lund (R)|
|Y Lyons (R)||Y MacGregor (R)||Y MacMaster (R)||Y McBroom (R)||n McCann (D)|
|Y McMillin (R)||n Meadows (D)||Y Moss (R)||Y Muxlow (R)||n Nathan (D)|
|Y Nesbitt (R)||Y O'Brien (R)||n Oakes (D)||Y Olson (R)||n Olumba (D)|
|Y Opsommer (R)||Y Ouimet (R)||Y Outman (R)||Y Pettalia (R)||Y Poleski (R)|
|Y Potvin (R)||Y Price (R)||Y Pscholka (R)||Y Rendon (R)||Y Rogers (R)|
|n Rutledge (D)||n Santana (D)||n Schmidt, R. (D)||Y Schmidt, W. (R)||Y Scott (R)|
|n Segal (D)||Y Shaughnessy (R)||Y Shirkey (R)||n Slavens (D)||n Smiley (D)|
|Y Somerville (R)||- Stallworth (D)||Y Stamas (R)||n Stanley (D)||n Stapleton (D)|
|n Switalski (D)||n Talabi (D)||n Tlaib (D)||n Townsend (D)||Y Tyler (R)|
|Y Walsh (R)||n Womack (D)||Y Yonker (R)||Y Zorn (R)|
House Roll Call 455 on 2011 House Bill 4701
Senators Anderson, Young and Gregory, under their constitutional right of protest (Art. 4, Sec. 18), protested against the passage of House Bill No. 4701.
Senators Anderson and Gregory moved that the statements they made during the discussion of the bill be printed as their reasons for voting “no.”
The motion prevailed.
Senator Anderson’s statement, in which Senator Young concurred, is as follows:
While a few reasonable changes have been made, this bill still has a number of terrible provisions. The changes to the provisions on overtime calculation in the (S-1) substitute are improved over the House version, which would have prohibited including any overtime in one’s final compensation. Further, I support the provision that returns the 3 percent taken since November 2010 from all state employees’ paychecks. It’s the right thing to do. What isn’t right is pretty much everything else in the bill.
This bill will require those in the pension to pay 4 percent of their salary if they want to remain in the system. Proponents will say that those workers can take the 3 percent with which they’ve just been reimbursed and put that toward the new cost. However, those employees should not have had the 3 percent removed in the first place. This is especially true for the nonexclusively represented employees who didn’t receive the 3 percent raise other employees received last year. I don’t understand why government is the only field where some would want the least experienced and most poorly compensated individuals to be employed, but that’s where we are today.
Over the past decade, state employees have made numerous concessions, from an increase in their share of health care costs to furlough days to the elimination of promised wage increases. Rather than launching another attack on our state employees, this Legislature would be better served working on something that helps them in their daily work to serve the people of Michigan. I urge a “no” vote on this bill.
Senator Gregory’s statement is as follows:
I rise in opposition to this bill. I rise in opposition because I believe this bill has not been vetted enough. We need more time to spend on this. There are some questions that need to be asked and more answers to those questions that need to be made. There is one particular question I would bring up and certainly has not been answered in the body of this bill. It says that this bill is intended to spread the unfunded accrued liability for the pension system across both the defined benefit and defined contribution payrolls, rather than just across the defined benefit payroll. I would like to know how you can do that. Define contribution is just an investment. It is just employees putting their money in, and it is being matched by the state. How can you take that money and put it in a defined benefit? In my view, you can’t. To say that this is now part of the bill that you will use the money that people are investing as a means to maintain accrued liability for the defined benefit flies in the face of what we should be doing. This is a mistake. I am sure there will be questions later on how we can do that. That is an example of moving too fast on a bill and doing things without going through all the fine lines.
Also I personally believe that there are other ways to achieve the goals that the state wants to achieve other than saying that we are going to eliminate the defined benefit and charge a 4 percent interest. We could have a hybrid system. There are several different ways to accomplish what we wanted without going this way, but with very little debate, I believe that is what has hurt the state in the past and will continue hurting the state if all parties are not heard and all ideas are not expressed. I would ask for a “no” vote.
Senator Gregory asked and was granted unanimous consent to make a statement and moved that the statement be printed in the Journal.
The motion prevailed.
Senator Gregory’s statement is as follows:
I am presenting this amendment to the bill before us that would make a person’s retiree health care dependent on the stock market. We all know that this is now something where you would be investing in. As anyone who has observed the market’s stomach-turning volatility since 2008 knows, some people who retired during that period saw half of their nest eggs wiped out. Similarly, people on fixed incomes have not had their health care at risk when a recession hits, and they are already struggling. There are no second chances in retirement, and seniors should not be worrying about whether they should have to choose between health care or paying their heating bills.
The amendment that I am offering would say that the money the employee invests in this system will be guaranteed by the state. If the stock market crashes or goes 90 percent belly up, they have put in $50,000 of their own money and the state will then make sure they receive their $50,000 back. I believe that is the least that we can do to guarantee our employees some sort of semblance of payments for health care that they won’t have otherwise. While this amount may not go very far, I feel it is the right and fair thing to do. I ask my colleagues for their support.
This better include these useless "retired" legislators.
Would this effect current retirees or only change the system for future retirees?