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2007 Senate Bill 547: Establish “graduated” retirement health benefits for new school employees

Public Act 111 of 2007

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.   Official Text and Analysis.
Referred to the Senate Education Committee on May 25, 2007
Reported in the Senate on May 31, 2007
With the recommendation that the substitute (S-1) be adopted and that the bill then 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 by voice vote in the Senate 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.
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 by voice vote in the House on September 30, 2007
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.
The motion passed by voice vote in the House on September 30, 2007
Received in the House on October 1, 2007
Amendment offered by Rep. David Law (R) on October 1, 2007
To revise the provision that 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. The amendment would change that to allow service credit "purchases" after just two years.
The amendment passed by voice vote in the House 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).
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.
Signed by Gov. Jennifer Granholm on October 1, 2007

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