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The war on teacher pensions

Dec 2, 2016

Pretty much anyone who ever amounted to anything has been inspired to success at some point by a teacher, usually in elementary or high school. Which makes the Michigan Legislature’s running war on teachers somewhat hard to understand.

Yes, I understand the Republicans hate teacher unions, primarily the National Education Association, because they often contribute to Democratic campaigns. 

But beyond that, they seem to want to punish teachers themselves, and to effectively drive talented young people away from going into the profession. I’ve known a lot of public school teachers in my lifetime.

To be sure, there are some bad teachers, though most don’t last. My guess is that the percentage of truly bad ones is far less than in most other professions, including elected officials. Most teachers work very hard for less than what people with equivalent educations could make in the private sector.

But my guess is that far more people have had their lives turned around by a teacher than by, say, a hedge fund manager.

Teachers for years could count on a decent pension, funded largely by the state. But in recent years, we decided that the billions in accumulating unfunded mandates was unsustainable and too much for future generations to bear.

Four years ago, the legislature set up a blended or “hybrid” system which is partly a traditional defined-benefit system and partly what’s called a “defined contribution” system.

That’s a fancy way of saying the only retirement they’ll have is what they put away themselves in a 401 (k)-style plan, possibly with some matching contributions.

This hybrid system is, by the way, fully solvent and fully funded. But Republicans in the state Senate, primarily Majority Leader Arlan Meekhof, aren’t content with that, and want to make sure teachers get no state pension whatsoever.

Apart from the Scrooge-like nature of all this, this would actually cost both the state and local districts a lot more money. Kerrie Vanden Bosch of the Michigan Office of Retirement Services told the Senate Appropriations Committee the change would cost the state billions and would do nothing to lower the nearly $27 billion in unfunded liabilities in the Michigan Public Employees Retirement System, costs accumulated before the current blended system.

Daniel Centers, a former teacher who is now a school board trustee in Livonia, told me this proposed change would also devastate local districts, and cost his system $37 million over the next five years. Despite that, Meekhof charged ahead, and seemed to imply it would be a good thing to discourage long-term teaching careers, saying, “I think folks coming into the workforce now don’t anticipate working for the same entity” for very long.

Well, fortunately, Governor Rick Snyder sees the insanity of this, and has apparently seriously threatened a rare veto. No politician wants to take an unpopular stand, and then not even be able to get the offending legislation made law.

As a result, some of Meekhof’s troops are deserting, and he acknowledged yesterday that he doesn’t now have the support to destroy the current pension system. This may be a rare victory for both teachers and taxpayers, but both groups need to be vigilant.

If something changes, those who hate teachers and their pensions will likely try again.

Jack Lessenberry is Michigan Radio's political analyst. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.