Michigan Votes Forum

Introduced in the House on February 21, 2002, to authorize a one-time early retirement incentive for certain state employees who retire between July 1 and November 1, 2002. State employees whose combined age and years of service totaled 80 as of November 1, 2002, would be eligible to elect to take advantage of the offer during a signup window of April 1 to April 30, 2002. The incentive 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. The bill also contains a provision to create a new retirement health care sub-account, which would pay for future state retiree health care benefits. This account would receive from the regular pension fund any contributions in excess of the amount deemed sufficient under actuarial and accounting standards to cover future pension expenses. In years when contributions were less than this amount, money could be transferred from the health care account to the pension fund. Also, the bill includes a provision which requires an application for a duty disability retirement to be filed no later than one year after termination of employment

The vote was 94 in favor, 8 opposed and 6 not voting

(House Roll Call 168 at House Journal 19)

Click here to view bill details.

"Mr. Speaker and members of the House:

This bill has been proposed as an answer to the massive deficit our state is facing due to the failed fiscal policies of the current administration. This bill is a short sighted proposal which will cost the state more mone than it will save. It is bad public policy because it does not set any priorities as to staffing levels in any department. If for example FIA which is already understaffed loses a large number of employees and they are replaced on a one to four basis services will be negatively affected. HB 5732 is not even fair to employees because four experienced employees will be replaced by one inexperienced employee thereby increasing the work load for all remaining employees. It also erodes the size of the bargaining unit. If an 80 and out proposal makes sence for a few employees then it is only fair to offer it to all employees."

Reps. Callahan and Dennis, having reserved the right to explain their protest against the passage of the bill, made the following statement:

"Mr. Speaker and members of the House:

I voted no on House Bill 5732 because this bill tries to do far too many things. It is being rushed through the legislative process under the guise that the legislature must enact the early retirement provisions quickly for the state to prepare. However, there is no reason that the health advance funding or disability changes must be on such a fast track. As it stands, HB 5732 picks winners and losers--the losers particularly being the corrections and conservation employees who cannot participate in the 'early out'. State employees who are close to 80 years, but not quite there, also lose, since this bill simply establishes an eligible window, rather than creating a permanent 80-and-out option. Furthermore, although HB 5732 does not mention a replacement ration, the 1 to 4 replacement Governor Engler has mentioned will leave continuing state workers even more overworked and underpaid. Finally, House Bill 5732 proposes extremely punitive changes for disability retirees, despite the fact that the current system does not present problems. In particular, the state will actually be able to take away a retiree's disability pension, without even attempting to return that individual to work. For all these reasons, I voted no on House Bill 5732."

"Mr. Speaker and members of the House:

I voted against this amendment because it severely limits the pool of qualified candidates from which the state can select to fill a federally funded position that is vacant by an early retirant. Defined benefit members opted to switch to defined contribution system in 1997. In addition, all employees who are hired after March 31, 1997 are members of the defined contribution system. So not only will the state be prohibited from filling the positions with individuals who are not state employees, even among state employees the application pool will be limited. This limitation may jeapordize some of the funds we receive from the Federal government if we can't find eligible employees from the limited subset of employees this amendment would provide."