MARSP works to future-proof MPSERS in Senate Bill 911

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This article was first published on Monday, June 24. MARSP is analyzing the budget passed by the Legislature early on June 27 and will soon update members.

As budget negotiations continue, MARSP works to future-proof MPSERS in Senate Bill 911

The state’s School Aid budget determines the financial resources available to school districts for the upcoming academic year. With school districts beginning their new fiscal year on July 1, MARSP urges the Governor’s office and Legislature to complete the state budget with Immediate Effect by next Tuesday. (A ⅔ vote in each chamber is required for a bill to take effect immediately.) 

Final negotiations for the School Aid budget are tied to SB 911, which would amend the MPSERS Act to allow the redirection of an expected additional $670 million MPSERS healthcare payment towards school operations. The Whitmer Administration proposed this redirection in February, citing the 2023 state actuarial valuation that shows MPSERS healthcare is 126% funded. Proposals from the Senate and House also redirected the $670 million in MPSERS healthcare overfunding.

Key Takeaways

  • MARSP’s commitment: As budget negotiations aim to wrap up this week, MARSP continues fighting for retiree interests and MPSERS’ long-term stability.
  • MPSERS funds are stable: The funds that supply public school retiree pension checks and healthcare benefits are stable. MPSERS healthcare is 126% funded. MPSERS pension is 68% funded and on track to reach full funding by 2038.
  • MARSP works to future-proof MPSERS in Senate Bill 911: While MARSP would like to see every possible dollar go towards MPSERS funds, our top priority is keeping healthcare 100% or more funded in the future. We are working to secure language in SB 911 that ensures retiree healthcare remains fully funded going forward, and that any unanticipated costs are funded by the state and not placed on the backs of school districts. This language is critical for ensuring the long-term security of the retirement system.

These proposals have sparked an ongoing debate about the language of the MPSERS Act and MPSERS debt payments. The pension fund, which had a funded ratio of 68.8% as of the 2023 valuation, is on track to have existing debt fully paid off by 2038. In practice, however, the state manages pension and retiree healthcare obligations through separate trust funds, and there is no mechanism for excess payments to roll from one to the other. 

While MARSP would like to see every possible dollar go towards MPSERS funds, our top priority is keeping retiree healthcare 100% or more funded. We are working to secure language in SB 911 that ensures retiree healthcare remains fully funded going forward, and that any unanticipated costs are funded by the state and not placed on the backs of school districts. This language is critical for ensuring the long-term security of the retirement system.

Click here to view MARSP’s previous budget update.

Amplify MARSP's efforts during budget negotiations!

You can support MARSP’s efforts by contacting your elected officials during the final days of negotiations.

Contact your legislators:
Click here to contact your State Representative
Click here to contact your State Senator
Click here to contact the Governor

Example script:

My name is [Your Name] and I am from [Your City]. I am a member of the Michigan Association of Retired School Personnel (MARSP), a nonpartisan organization working on behalf of public school retirees to protect our pensions and health care benefits.

My fellow MARSP members and I are concerned about the proposed change to the MPSERS Act and the future stability of MPSERS funds. We urge you to support language in SB 911 that guarantees retiree healthcare remains fully funded and ensures any unexpected costs are covered by the state, not passed to school districts. We also ask that you uphold the state’s commitment to pay off MPSERS unfunded pension costs by 2038, if not sooner.

Thank you for taking the time to consider how this issue impacts your retired constituents.”

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