Tuesday, May 22, 2012


How would you feel about writing an ANNUAL check for nearly $49 million for something you stopped using in 1996?  That’s what MPSERS is charging Central Michigan, Eastern Michigan, Ferris State, Lake Superior, Michigan Tech, and Northern Michigan Universities. These seven universities operate under “special” rules implemented by the MPSERS board designed to support a pension system that is nearly $50 billion underwater. 
Why the “special” rules? The easy answer is that there is no university representation on the MPSERS board, a board dominated by retired K-12 school employees. These seven universities don’t participate in MPSERS anymore, they were removed from the system by the State Legislature in 1996. Yet their mandated contributions to MPSERS have escalated by 193% since 1997 because of their legacy employees. 

The chart illustrates the total problem. 

Aggregate MPSERS cost paid by Central, Eastern, Ferris State, Lake
Superior, Michigan Tech, and Norther Michigan Universities
Notice how the runaway cost of the Health Care component has exploded -- a benefit not guaranteed or constitutionally protected. 
The pain inflicted by MPSERS is not limited to K-12 districts that grapple with a MPSERS levy of 27 cents on top of every employee salary dollar; the seven Universities are footing a bill that is a multiple of every employee salary dollar. These Universities don’t even have a say in any efforts to reform MPSERS. So when you see that tuition bill, understand that every student is paying for poor decisions made decades ago, at some Universities that cost is now approaching $900 per student, and growing. It’s time to fix this system for everyone; while the legislature works on SB1040 (MPSERS reform) don’t hang our Universities out to dry. 

SB1040 can be amended to allow for a solution that brings these Universities into the discussion on fixing the health care component while protecting the basic pension benefit. This would allow of costs to be controlled, pensions supported, and provide for mitigated tuition shock. 

1 comment:

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