2021 House Bill 4188

Revise school pension calculations

Introduced in the House

Feb. 9, 2021

Introduced by Rep. Thomas Albert (R-86)

To require managers of the state-run school pension system to use a “layered amortization" method for repaying the debt accumulated by failing to contribute enough to meet the system’s pension promises to employees. This requires officials to amortize (pay back) each “layer” of underfunding accumulated in a given period over not more than 10 years. The bill would also permit and require pension managers to assume 6.8% annual growth in pension fund assets when determining the amount needed to make good on future pension promises.

Referred to the Committee on Appropriations

Dec. 1, 2021

Reported without amendment

With the recommendation that the substitute (H-1) be adopted and that the bill then pass.

Jan. 25, 2022

Substitute offered

The substitute passed by voice vote

Passed in the House 96 to 5 (details)

To establish procedures and standards for managers of the school employee retirement system to select a vendor for the defined-contribution annuity option authorized for retirees by the <a href="https://www.michiganvotes.org/2017-SB-401">2017 pension reform law</a> that largely replaced the perennially underfunded “defined benefit” pension system with one that offers 401k accounts with fairly generous employer contributions, or an annuity to be created later, which this bill now would do.

Received in the Senate

Jan. 26, 2022

Referred to the Committee on Appropriations

Dec. 7, 2022

Passed in the Senate 23 to 8 (details)

Vetoed by Gov. Gretchen Whitmer

Dec. 22, 2022