Tagged: retirement

Michigan state workers may soon be required to contribute four percent of their salaries into their retirement benefit plans, or choose to convert their retirement benefits to a 401-K plan.

That’s according to a bill approved by the state House.

Democratic state Representative Brandon Dillon said the proposal puts the health and wellness of future retirees at risk.

"We should be looking at ways to expand access to health care, whether in the public or private sector, and the reality is this bill is going to make people’s health care and the ability to get treatment essentially based on the stock market, which we know in the past 10 years has been pretty tough, and I just don’t think that’s the right direction to go," said Dillon.

State employees currently contribute three percent of their salaries to their retirement benefits plans.

Republicans say the current retirement plan is not financially sustainable with too many retirement obligations going into the future.

When your local state legislator campaigns for reelection next time, or runs for some other office, they may remind you of how they helped save the state by gallantly giving up their retirement health care benefits.

When and if they do, you might want to remember that this is mostly a form of horse exhaust. With a very few exceptions, they didn’t vote to give up their benefits at all.

They voted to deny benefits to other people who haven’t been elected yet, and who could theoretically change the law back.

As for our current band of elected leaders - they are mostly keeping their benefits, thank you very much.

Here’s what’s really going on. Retired Michigan legislators have, in fact, been getting taxpayer-subsidized health care benefits since the nineteen-fifties. By the way, it was a solidly Republican legislature that first voted to do this. Contrary to some propaganda you may have been hearing, the benefits aren’t completely free, and they don‘t kick in till the ex-lawmakers reach age fifty-five.

The people who manage more than 50 billion dollars in state retirement funds say the recent stock market drop should not be a serious long term problem.    More than 400 thousand former state employees, teachers, state troopers and  judges receive checks from the state managed retirement funds. 

Terry Stanton is with the State Treasury Department.   He says the retirement fund  is managed to absorb the changes in the financial world.