The law, signed in 2010 by Gov. Jennifer Granholm, requires teachers to chip in 3% of their pay to cover retirement health coverage and keep the retirement system sustainable. It’s important for Gov. Snyder to keep defending that law.
Gov. Rick Snyder has made shoring up public employee pension plans a top priority of his administration. But he’s getting little thanks from the workers whose retirement benefits are on the line.
The governor is pushing the appeal of a court ruling that struck down a Granholm administration initiative requiring teachers to contribute 3 percent of their pay to cover the cost of their health care in retirement. Though it was Gov. Jennifer Granholm who signed the 2010 law during her last year in office, it is Snyder who is taking the heat.
Both Granholm and Snyder were right. The pension system is unsustainable, and will require sacrifice across the board to bring it back to health.
At stake is more than $550 million withheld from school employee paychecks from 2010 to 2012. The state is holding that money in escrow awaiting appeal of the ruling.
Teachers unions contend withholding 3 percent from school employee wages is unconstitutional, since retiree health care benefits are not guaranteed by the state.
“It is shameful and unconscionable that he (Snyder) has decided to prolong this fight and continue his attack on school employees across the state,” Michigan Education Association President Steven Cook wrote recently about the case, ignoring that it was the governor’s Democratic predecessor who hatched the idea.
The MEA is one of the teachers unions that brought the case against the state.
The governor’s office filed an appeal last month to the Michigan Supreme Court. The state has lost in both trial court and the Court of Appeals, which is why Snyder is taking it now to the state’s High Court.
Snyder is hopeful he can prevail, despite the fact Attorney General Bill Schuette is not representing him in this last appeal, after doing so in the trial and appeals courts.
There is good reason for Snyder to pursue the case. The state budget office estimates the unfunded liability for retiree health care in the school employee retirement system, known as MPSERS, is currently $9.3 billion. That’s why Granholm and a bipartisan Legislature felt the law was necessary six years ago and why Snyder does, too.
Overall pension funds are grossly underfunded at $26.7 billion. Snyder has worked to reduce that liability by increasing annual cash payments, among other measures the Legislature has passed. His goal is to restore the funds to balance by 2035.
Reforms in 2012 to teacher retiree benefits changed the 2010 law to say teachers could opt out of the health benefits in retirement, meaning they had no obligation to contribute. Also, Snyder spokeswoman Anna Heaton notes those who opted out of the system after the 2012 legislative reforms could receive refunds for what they had to contribute in the two years prior.
Similarly, money withheld from teachers’ paychecks from 2010 to 2012 is refunded to teachers if they leave their jobs prior to retirement.
Teachers who don’t plan on taking advantage of the retirement health perks can get their money back. The state isn’t stealing from them.
But for those who do want to secure these generous, taxpayer-funded benefits, it seems fair for teachers to make a small contribution. That’s what is at stake in this lawsuit.
—THE DETROIT NEWS