The Michigan House today unanimously approved Rep. Thomas Albert’s legislation to build upon recent reforms improving the financial prospects of the school employee retirement system.Albert’s legislation provides a more stable and predictable method of paying into the system to erase debt and preserve retirement benefits for teachers. He said it’s an important step to follow changes signed into law last year.“We have made significant and positive changes to improve the retirement system, and brighten the financial future of our schools and our state,” said Albert, of Lowell. “The legislation we’re talking about today is the next logical step in that evolution. It’s also a necessary step to build the better Michigan we want for our children and grandchildren.”Albert said his proposed changes will greatly enhance the chances of truly eliminating the retirement system’s $30 billion debt by 2038, which is the current goal.“The legislation would eliminate a flawed and unpredictable methodology now used to project the state’s debt payment schedules,” Albert said.Payment projections are now based on an assumption that school payroll will grow by 3.5 percent annually – but payroll has been declining for more than a decade, which means payments to offset unfunded liabilities have fallen short and debt has continued to rise.Albert’s plan calls for gradually reducing the payroll growth assumption over time until it reaches zero. Debt then would be paid off along the lines of a fixed-rate home mortgage, with “level dollar” payments that remain the same year to year.“If we don’t make this change, we could wind up in serious trouble,” Albert said. “We could be facing a mountain of debt we cannot climb, with payments too large to make. The good news is this legislation offers a solution.”Albert’s legislation affecting the Michigan Public School Employees Retirement System is House Bill 5355. The bill advances to the Senate for further consideration.### 27Feb Michigan House approves Rep. Albert’s bill to further improve school employee retirement fund Categories: Albert News,News
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