|June 21, 2017
In This E-Mail:
Last week, the House and Senate both approved sweeping reform to the Michigan Public School Employee Retirement System (MPSERS). The measure has been presented to the Governor for his signature!
MPSERS reform is nothing new. School employee retirement plans have incurred many changes to benefit levels and payment responsibility over the last several years and now, see a migration to pushing the investment risks away from the state and to employees.
There are several changes that need a more detailed review. Although some of the changes may be familiar due to constant media attention, other changes may have unintended consequences, that as of today, are still unknown.
Here are some of the changes of interest:
“New” Defined Contributions Plan
“New” Hybrid Plan
We still have some questions that are unanswered regarding the use of current operating expenditures as a factor for assessing the districts UAAL payments, as well as implementation questions of how districts will change procedures for any new reporting or payment requirements to the Office of Retirement Services (ORS). We have requested to be a part of any work group that may develop guidance for districts. This will be both an administrative and accounting issue that will need to be well thought out in its implementation.We will keep you posted on any implementation issues districts will need to consider in the future.
There were plenty of details on the budget in our eblast dated June 8, but we think it’s a good time to explain where we are in the process and to review some changes that were made in the final conference committee for HB 4313 (H-1) (C-1), the 2017-18 Omnibus Education Budget (Ed Bus). The bill includes the budget areas of School Aid, Community Colleges and Higher Education. This is a compilation of the three individual budgets, however, changes can be made from the earlier individual conference committee reports.
There were some allocations that appeared in the final Ed Bus that were not in the individual budgets that we thought you should be aware of. We have updated our web page for the 2017-18 School Aid Budget with analysis of the final report.
Here are some notable changes that are included as part of the final Ed Bus:
MPSERS One-Time Deposit (Sec. 147c(2))
High School Per Pupil Bonus (Sec. 22n)
The Ed Bus is now in the Senate heading for “up or down” vote from the legislature. It is expected to be up for a vote tomorrow (Thursday) however until that occurs, we are still in a holding pattern. Assuming it passes, there is still an opportunity for the Governor to review and veto sections of the bill if he wishes.We’ll keep you posted as the process continues! Monitor our 2017-18 School Aid Budget webpage for the latest information!
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