pensions

The week in review: taxing pensions, foreclosures and international bridge

Jack Lessenberry and Rina Miller — Sat, 13 Apr 2013 13:02:00 +0000

This week in review Rina Miller and Jack Lessenberry discuss the possibility of repealing a tax on pensions, how Michigan's home foreclosure rate is no longer the worst, and how the international trade crossing has a presidential permit to move forward.

Teachers and school employees face pension plan deadline

Michigan Radio Newsroom — Wed, 10 Oct 2012 17:02:36 +0000

Michigan’s 250,000 teachers and state school employees face a deadline of October 26th to choose a new retirement plan. But some groups are asking the State Supreme Court to extend that deadline.

State legislators passed a law changing the pension system in August. Ellen Hoekstra represents the Michigan Federation of Teachers.

"We’re advising people to get as much information as they can and at least fix in their own mind what option they think would be best for themselves and their own family – prior to the 26th – in case that ends up being the deadline," said Hoekstra.

School employees will have four options.

One would require them to pay more than they pay now, to get the same pension.

Another option would allow people to pay the same amount they pay now, but get a smaller pension when they retire.

State employees call court ruling a 'victory'

Jake Neher — Fri, 28 Sep 2012 19:52:39 +0000

Thousands of state employees are applauding a judge’s ruling that they shouldn't be forced to pay for their pension benefits.

An Ingham County Circuit Court judge said today that a rule requiring state employees cough up four-percent of their salaries to keep their pensions is unconstitutional.

She said it’s effectively a pay cut, something only the Michigan Civil Service Commission has the authority to enact.

Ray Holman is with UAW Local 6000, the largest state employee union in Michigan.

Deadline day for GM retirees pension buyout offer

Tracy Samilton — Fri, 20 Jul 2012 14:40:03 +0000

Today is the deadline for more than 40,000 General Motors retirees to accept their former employer's offer of a lump sum buyout of their pensions.

Otherwise, their pensions will be taken over by Prudential Insurance.

GM's Randy Arrix said the change is part of the company's efforts to create what it calls a "fortress balance sheet." Getting underfunded pensions off the books strengthens the balance sheet.

"Pension obligations are very volatile, and they're volatile because they're dependent on some things within our control like contributions, and other things that are not, said Arrix.

Some GM retirees are angry about the change, which they see as a broken promise by GM, but for others, the buyout is an opportunity to control their own money.

Michigan Senate to vote on changes for teachers retirement health care plans

The Associated Press — Wed, 18 Jul 2012 10:09:50 +0000

LANSING, Mich. (AP) - The Michigan Senate is expected to vote on legislation that would end state-provided health care coverage in retirement for new public school hires and require current employees to pay more toward pensions.

The Wednesday legislative session is the only one scheduled for July. The Senate is expected to take up the bill passed last month by the House.

The bill doesn't contain earlier language that would force new teachers into a 401 (k)-style plan. The measure calls for studying how ending the pensions would affect the state.

Retirees await details of Ford’s offer to pay pensions in lump sum

Lindsey Smith — Wed, 16 May 2012 11:30:00 +0000

90,000 white collar Ford retirees will soon have a big decision to make. Should they stay in the auto company’s pension plan? Or take their chances with a lump sum payout instead?

The offer Ford Motor Company announced in late April is believed to be the first of its kind for such a large ongoing pension fund.

Lump sum the buzz at Ford retirement clubs

In Michigan there are more than 30 clubs for Ford retirees. The lump sum option is the conversation at retiree club meetings right now.

“Retirees are going to have to make a decision about mortality, about death; their own. That’s not something we do every day,” Ford retiree Charles White said. White worked at the Dearborn campus for 29 years in engineering management. He retired in 1996.

Rising pension costs may sink plans to hire more cops in Lansing

Steve Carmody — Tue, 15 May 2012 01:34:29 +0000

Rising pension costs may throw a monkey wrench into the city of Lansing’s plans to hire police officers next year.

Lansing’s mayor proposed using money from a special public safety millage to rehire nine laid off police officers. But the mayor’s office released a draft report Monday which says the city will have to come up with nearly two million dollars next year to cover rising police and fire pension costs.

Dems see political opportunity in tax deadline

Rick Pluta — Mon, 16 Apr 2012 10:10:05 +0000

Democrats in Lansing plan to use this week’s tax-filing deadline to re-open the debate about last year’s tax overhaul at the state Capitol.

Democrats think the tax issue will help them in elections this year. Seniors born after 1946 have their pensions taxed for the first time. Deductions and tax breaks for many charitable donations will be gone when state taxpayers file next year. At the same time, taxes were lowered for many businesses.

Democrats intend to remind voters of that as they try to win an additional nine seats in November to take control of the state House. They say more than a dozen swing districts will be the target of fierce campaigning on the issue of taxes.

Republicans says there are elements of the tax overhaul that were unpopular, but necessary to streamline and simplify tax filing and to make Michigan a more business-friendly state.

Michigan teachers oppose proposed cuts to pensions, retirement health benefits

Rick Pluta — Wed, 11 Apr 2012 20:35:11 +0000

Teachers turned out by the hundreds in Lansing to oppose legislation that would force them to pay more for their pensions and retirement health care, or have their benefits reduced.

Some of them protested outside a state Senate committee hearing today on the legislation.

One of them was Pinckney teacher Sam Ziegler. He says the measure would break a promise to his profession.

"I knew I wasn't going to be a millionaire teaching," Ziegler said. "But it was something that was worthwhile that benefited others and myself, and I was told that I'd have a pension to go to and now it’s just slowly eroding and I see the danger that it will keep eroding away."

But some Republicans like state Senator Patrick Colbeck says the public school employee pension fund has liabilities so big the system could go insolvent if nothing is done.

"Somebody’s got to pay for that eventually, later and right now that’s being pushed off because – if we’re talking about dealing with unfunded liabilities – being pushed off to the same kids that we're working hard to educate right now," said Colbeck.

Teachers say state government has increased the stress on the system with budget cuts that reduce districts capacity to pay into it, and forced layoffs that mean fewer people paying into the system.

Parents question lawmakers on cyber and charter schools, funding changes

Lindsey Smith — Thu, 08 Mar 2012 06:30:46 +0000

Five state lawmakers took tough questions from parents in East Grand Rapids Wednesday night. The legislative committee of the schools' PTA hosted the lawmakers; four republicans and one democrat. Hot issues included a proposed bill on cyber schools and the governor’s proposed k-12 budget for next school year.

Cyber charter schools

Last year Michigan lifted the cap on how many charter schools public universities can run. Now, there’s a bill proposed that would allow more cyber charter schools to operate.

Many parents asked the lawmakers why cyber schools get the same amount of state money per child as brick and morter ones. State Representative Peter MacGregor (R-Rockford) said cyber schools shouldn’t get as much, saying the savings should be passed on to the taxpayers. Cyber charters can be run by national for-profit companies.

Tina Murua has two kids enrolled in East Grand Rapids schools. “I fear that they’ve couched the whole thing in terms of parental choice because…who can argue with that? It’s a brilliant strategy but it was a false choice,” Murua said. She worries companies are pushing states to allow more cyber schools just to make money.

The state senate already approved the cyber charter school bill. It passed the State House Education Committee in late February.

Ford to add $3.8 billion to pension plans this year

The Associated Press — Wed, 22 Feb 2012 18:15:00 +0000

DETROIT (AP) - Ford Motor Co. says it will pump $3.8 billion into its global pension plans this year as it tries to get them closer to fully funding their obligations.

The company also says that it has raised the annual pay for its 16 directors by 25 percent to $250,000.

The disclosures came in Ford's annual report filed Tuesday with the U.S. Securities and Exchange Commission.

Ford says it will put $2 billion into the U.S. pension plan, make $350,000 in benefit payments and put the remaining $1.45 billion into other plans across the globe.

The report says that as of Dec. 31, the U.S. plan was $9.4 billion short of its obligations, while global plans, which include the U.S., were short by $15.4 billion.

Report says Michigan's tax changes will hit low income families hardest

Mark Brush — Thu, 02 Feb 2012 20:35:28 +0000

A new report by the Michigan League for Human Services takes a look at Michigan's shifting tax policy and it's impact on low-income families.

The report shows what we already know, that businesses in Michigan will receive a tax cut in the state while individuals will pay more.

Low income families, the report's author Joanne Bump concludes, will be hit the hardest.

More than 70% of eligible Kalamazoo City workers already signed up for early retirement

Lindsey Smith — Thu, 29 Dec 2011 16:17:23 +0000

265 Kalamazoo City employees are eligible for the early retirement incentive. According to the city’s Human Resources Director Jerome Post, 191 of them have already signed up. “I have to admit I’m a little surprised at the number of people,” Post said the number is higher than he expected.

“It’s been a little bit anxiety ridden for us but at the same time we’ve been very excited about the opportunity this presents for us to restructure virtually every department in the city,” Post said.

Michigan retirees call for repeal of new retirement income tax

The Associated Press — Fri, 02 Dec 2011 18:14:28 +0000

LANSING, Mich. (AP) - Organizations representing retiree groups say they want the Michigan Legislature to repeal an unpopular tax on pensions, or lawmakers will pay the political price in the 2012 election.

The AARP and groups representing public employee retirees called for a repeal Friday before the new tax plan takes effect in January.

The groups say they haven't ruled out filing suit in federal court to try and block the changes, but they are focused on getting lawmakers to take action.

Governor, Legislature need to find $60 million to balance budget

Rick Pluta — Mon, 21 Nov 2011 11:23:43 +0000

When the Legislature returns to the state Capitol next week, there will be another item added to its to-do list. That is: coming up with millions of dollars to fill a budget gap created by the state Supreme Court decision on Michigan’s new pension tax. The court upheld the tax on pensions, but said denying a tax break to some higher-earners effectively created a graduated income tax.

A graduated income tax is not allowed under the state constitution. That part of the decision also blew a $60 million hole in the state budget. Sixty million dollars is a small part of a general fund budget that exceeds $8 billion.

But it is an amount the governor and the Legislature will need to make up to meet their obligation under the state constitution to have a balanced budget. One possibility would be to use a projected surplus from last year’s budget to fill the gap. That number becomes official in January. But it appears the surplus will be somewhere near $400 million.

Lawmakers are already fighting over what to do with that money. Democrats say it should be used to restore some budget cuts to schools. Republicans say it should go into the state’s “rainy day” savings fund, or to pay down debt.