Senator Johnson’s statement is as follows:
I rise in support of my amendment. Over half—58 percent—of new participants in the school employee retirement system default currently into the defined contribution plan. This plan has predictable and finite costs to the state and local school districts, but the bill before us instead seeks to put new enrollees into a defined benefit pension plan. Despite assurances that the current pension plan is actuarily sound, I would point out that the unfunded liability on the state’s legacy pension plan for school employees is $38 billion. And in the deficit for other post-employment benefits, the state owes more than $40 billion in unfunded liabilities for retired school employees. The total of these unfunded liabilities represents half—50 percent—of our total annual budget for Michigan for everything.
My amendment would require that if the current pension plan accumulates an unfunded liability, that the default retirement plan option would revert back to the defined contribution plan so that the hard-working people of our state will not be left with the bill, holding the bag and paying more taxes. I ask for my colleagues’ support on this amendment.
Senator Polehanki’s first statement is as follows:
Mr. President, the importance of House Bill No. 5021 is that teachers are automatically opted in to the plan that most teachers choose. This amendment would defeat that purpose. I ask my colleagues to vote “no” on the amendment.
Senator Polehanki’s second statement is as follows:
I encourage a “yes” vote on House Bill No. 5021. Having been a brand new teacher once, I can tell you the last thing I was thinking about was retirement. Currently, a new teacher has 75 days to choose between one of two preferred retirement options, and whatever they choose is permanent. The current default option if a teacher, for whatever reason, doesn’t make that selection is a plan that many teachers deem less substantive and stable compared to the other plan. The Senator from the 18th District said a lot about his opinion on pensions and that whole system—this bill would simply change the default option, that’s it.
The following bill was read a third time:
House Bill No. 4945, entitled
A bill to amend 1927 PA 175, entitled “The code of criminal procedure,” by amending section 16m of chapter XVII (MCL 777.16m), as amended by 2023 PA 22.
The question being on the passage of the bill,
The bill was passed, a majority of the members serving voting therefor, as follows: