Teachers Suffer Under Senate Bill 1040

Legislation does more harm than good
Thursday, June 14, 2012

State Representative Jeff Irwin (D-Ann Arbor) said today he is frustrated by Senate Bill 1040, another bill that attacks teachers by amending the Michigan Public School Employees’ Retirement System (MPSERS) Act.

“This bill doesn’t solve the financial problems of our pension system that have been exacerbated by the privatization of public schools,” said Irwin. “Instead, SB 1040 is a backdoor pay cut for teachers that will draw even more resources out of the classroom. How can we expect our teachers to focus on educating children when the legislature is constantly changing their pay, their retirement and their health care? Those are supposed to be local decisions.”

Among other things, SB 1040 requires teachers to either contribute more in order to continue with their current benefits or transfer any future years of service to a defined contribution plan. The legislation would also require that all current retirees pay a little more than double to continue receiving their health care coverage, an amount many will be unable to pay due to fixed incomes. The average pension of a retired school employee is around $20,000 and retroactively increasing their costs for health care is a real burden to fixed income retirees. Also, this bill eliminates all retiree health care for new teachers. Not only will current and retired employees suffer, but new employees will be discouraged from teaching in Michigan.
From 2001 to 2010 the number of active employed MPSERS members has declined by 23.8 percent. During that time the average pension is $22,545 - far from the extravagant sum portrayed by opponents of public education.

“Rather than ensuring MPSERS long term stability, Republicans have passed legislation that supports privatization of services and expands charter and cyber schools without acknowledging or understanding the impact that those decisions have on the overall health of the pension system,” says Irwin. “We should end the trend to privatize public education and restore the millions of dollars raided from the School Aid Fund. This would solve our underfunded pension problem and put more resources into our schools.”

“Our educators have already suffered through budget cuts resulting in lower pay, less benefits, and increases class size. Now the Republicans want to turn around and blame employees for a broken pension system when just last year they chopped the legs out from under the pension system by privatizing public education.”