Political
Tell Your Legislator That Our Prisons Are Not For Sale!
Private prison bills (HB 5174 & 5177) would reopen the 1,700 bed private GEO facility in Baldwin, MI, and cause the closure of up to two state run facilities. This affects our sister local the Michigan Corrections Officers (MCO).
There is a call-in number that will get you patched through directly to your legislators. We need to you act now even if you’ve already made a call. AND, we need you to spread the word and share this number, 1-877-279-1443, with friends, family and co-workers.
Please educate your lawmakers and their staff on why private prisons are dangerous and harmful to the communities and fail to deliver on savings! Ask your legislator to oppose any bill that would privatize prisons and especially call for a “NO VOTE” on HB 5174 & 5177.
2012 Lobby Day and New Solutions Press Conference
Saginaw area members meet with State Representative Stacy Erwin Oakes
On Wednesday, May 2, 2012, SEIU Local 517M held its annual Lobby Day at the state Capitol in Lansing. It was attended by over 50 SEIU Local 517M members. These members met with their state representatives and senators to discuss the issues that impact their work. At noon, a press conference was held on the capitol steps to reenforce the message that we are ready to bring New Solutions to the problems facing Michigan. Speakers included: SEIU Local 517M President Bill Ruhf, Melanie McElroy from Common Cause Michigan, State Representative Brandon Dillon, and State Senator Bert Johnson.
Pictures of the activities can be found here.
Press Coverage of the event:
WLNS TV-6, May 2, 2012 – http://www.wlns.com/story/18062189/state-workers-union-to-hold-news-conference-on-state-spending
Detroit Free Press, May 2, 2012 – http://www.freep.com/article/20120502/NEWS15/205020354/Employee-unions-in-Michigan-target-higher-pay-to-private-contractors
We encourage members who attended to Blog about their experiences below.
Register for the 2012 SEIU Lobby Day
SEIU will be holding our annual Lobby Day at the state capitol in Lansing on Wednesday, May 2, 2012, from 9:00 am to 3:30 pm.
A brief agenda for the event is:
9:00 am – Continental Breakfast and Guest Speakers
10:00 am – Members attend scheduled lobby visits
Noon – Lunch at 4th Floor with legislators
1:00 pm – Members attend scheduled lobby visits
3:00 pm – End of day
Register Here
Press Coverage on School Retirement Legislation
Gongwer -March 22, 2012
M.P.S.E.R.S.: 8% Contribution For Most School Workers
Most current public school employees wanting to keep their pension benefits would have to contribute at least 5 percent and as much as 8 percent of their salary to the system under a massive restructuring bill introduced Thursday in the Senate.
Much anticipated, supporters of SB 1040 say it will address the $45 billion in unfunded liability in the system and reduce how much of the School Aid Fund has to go toward the Michigan Public School Employees Retirement System and instead free up that money long-term for actual K-12 instruction.
“This bends the cost curve down in the future billions of dollars,” said Sen. Phil Pavlov (R-St. Clair), a co-sponsor of the bill who was part of the group that drafted it. “Over time, these changes begin to amplify throughout the system and there’s massive savings going forward.”
The bill was sent to the Senate Appropriations Committee, which is expected to hold its first hearing on the bill next week.
There are three current plans in the MPSERS system. The newest one, enacted two years ago for new hires, would essentially see no changes. New hires would continue to go into that plan with a final average compensation cap of $100,000.
However, the basic system, which handles employees hired before 1990, and the Member Investment Program, which overall handles the vast majority of public school employees, would see major changes.
Those in the basic system currently make no contribution to the pension system. They would have to contribute 5 percent under the bill. Those in the MIP system contribute 3.9 percent currently. That would rise to 8 percent under the bill.
Employees could choose not to have to pay the added contribution, but then their pension multiplier would drop from 1.5 percent of final average compensation to 1.25 percent.
Employees also could decide to freeze their pension benefit at current levels and switch to a 401(k)-style plan where they would have no required contribution. The state would contribute an amount equal to 4 percent of the employee’s salary.
On the health care side, public school employees would continue making the contribution equal to 3 percent of their salary to fund retiree health care that was instituted in 2010. The Ingham Circuit Court has ruled the contribution unconstitutional, but an appeal has long been pending before the Court of Appeals.
But there would be additional changes. Retirees would now have to pay 20 percent of the cost of their health insurance premium, up from 10 percent.
And new hires would lose state-backed retiree health insurance. Instead, they would have 401(k)-type accounts where the state would contribute an amount equal to 2 percent of their salary. Employees could contribute up to 2 percent. Workers could then put those funds toward the cost of health care when they retire.
Most current employees also would have to wait until they were 60 to access retiree health care.
Some issues remain a work in progress. The bill does not address so-called stranded costs – how to address the issue of districts privatizing certain services, removing a source of contributions to the system, even as the level of benefits remains. And the bill does not address public universities, some of which are in the MPSERS system.
Sponsors of the bill said savings would be realized over the long-term.
“It took us forever to get into this situation,” said Sen. Roger Kahn (R-Saginaw Township). “It’ll take us damn near forever to get out of it.”
The Michigan Education Association is still reviewing the bill, but there are serious concerns, spokesperson Doug Pratt said.
For those in the MIP plan, which Mr. Pratt said houses the “vast majority” of those in MPSERS, they will now have to pay 11 percent of their salary toward retirement benefits when combining the 8 percent for pension and 3 percent for health care.
“That is a huge percent of salary for people who are not living high on the hog to begin with,” he said.
And doubling the contribution for current retirees from 10 percent to 20 percent of the insurance premium is a significant hit too, Mr. Pratt said.
“You add that to the new pension tax and you’re taking people who already are on a fixed income … and taking a huge bite out of their monthly budget. At what point is enough enough?” he said.
Election Results SEIU Local 517M Was Watching
Taylor School Board
SEIU endorsed candidate Ronald Miller was among the top two vote getters to win election to the Taylor School Board. Ron Miller is a recently retired SEIU member from the school district. SEIU endorsed candidate and current Board member James Lakatos lost his reelection bid.
Saginaw City Council
Three SEIU endorsed candidates win election to the Saginaw City Council. Annie Boensch, Norman Braddock, and Amos O’Neal, received the three highest vote totals in this election and were declared the winners. Endorsed candidate and SEIU member, Ernie Ahmad, employed by Saginaw Mental Health, lost his election bid to the Council. All endorsed candidates had adopted the New Solutions for Michigan principles.
Saginaw School Board
Two SEIU endorsed candidates win election to the Saginaw School Board. Ruth Ann Knapp and Rudy Patterson were the top vote getters.
Dearborn Heights Schools
The retired SEIU 517M Dearborn Heights Schools Unit President Vickie Bracken was among the top two vote getters and won election to the Dearborn Heights School Board.
Lansing City Council
SEIU Healthcare Michigan member, Jody Washington, wins her election to Lansing City Council 1st Ward. She defeated former State legislator Lynn Martinez.
Region 1 Endorses Local Candidates
The SEIU Local 517M Region 1 membership has endorsed candidates Ernie Ahmad, Annie Boensch, Norman Braddock, Cirven Merrill and Amos O’Neal for the upcoming Saginaw City Council seats. Ruth Ann Knapp and Rudy Patterson secured endorsements on their bids for Saginaw City Schools Board of Education seats from the SEIU membership as well.
“All eleven candidates who filled out our questionnaires and participated in our candidate forum last week needed to be familiar with our New Solutions for Michigan Campaign, and apply the same revenue savings principles to come up with ideas on how we could create New Solutions for the City of Saginaw and Saginaw Public Schools” said Marianne Woods, Member Leadership and Action Director for SEIU 517M.
“The endorsed candidates demonstrated the highest level of commitment to our New Solutions campaign. With our city and school district’s economic challenges, these candidates truly have the best interest of all who live, work and go to school in our community” Woods further stated. The New Solutions for Michigan report can be viewed in its entirety here.
Legislator Health Care Changes
This story appeared in the October 3, 2011 edition of MIRS:
95 Lawmakers Hit By Updated Lifetime Benefits Ban
A new version of a bill killing so-called “lifetime” health care benefits for lawmakers is up in the Legislature this week and would apply to almost every House member, but protects almost the entire Senate.
Under a substitute of HB 4087 sponsored by Rep. Joel JOHNSON (R-Clare), lawmakers who aren’t fully vested by Jan. 1, 2013, would not be eligible for retirement health benefits.
Currently, the state is required to kick in 90 percent of the retiree health insurance premium payments for legislators elected after March 31, 1997. To qualify, lawmakers must have served at least six years and be at least 55. Coverage typically lasts until they’re 65, when Medicare benefits begin.
So the bill would take away the benefit for all but 14 current House members and just two senators — Sens. Pat COLBECK (R-Canton) and Vince GREGORY (D-Southfield). Unlike other freshman senators, Colbeck never served in the House and thus wouldn’t be vested by 2013. Gregory only served one House term.
The Senate is slated to take up the bill this week, probably on Wednesday, said Amber McCANN, spokeswoman for Senate Majority Leader Randy RICHARDVILLE (R-Monroe). The issue is one of the Senate GOP’s top fall priorities (See “Tide Changing On NITC In Senate?” 9/21/11).
The original version of HB 4087 would have been retroactive and applied to every lawmaker in office, eliminating health care benefits for legislators taking office on or after Jan. 1, 2007.
“Some wanted it to be retroactive. Some didn’t,” McCann said. “This represents a compromise.”
MIRS asked about legal concerns about the legislation applying to current lawmakers. She said that it’s her understanding that there are no constitutional concerns with the new version of the bill.
Sen. Rick JONES (R-Grand Ledge) has long banged on the lifetime benefits issue and had a version of the bill (SB 0026), but MIRS has learned that his will not be the one to go to Gov. Rick SNYDER‘s desk.
Michigan GOP House Votes Hurt Workers’ Rights
The September 5, 2011 edition of “Inside Michigan Politics” identified the state house on a “most conservative to most liberal” scale using actual House Roll Call votes on 25 key litmus test issues. It is important to note that, of the twenty five pieces of legislation promoted by the GOP-controlled House, 28% were blatantly anti-union/anti-worker bills.
Here are the seven most egregious:
3/10/11, Roll Call #32, House Bill (HB) 4152, establishing that when a government employee union contract has expired and no replacement pact has been negotiated, any seniority based automatic pay hikes for individual employees (“step increases”) may not occur (Y=Conservative, No=Liberal)
3/25/11, Roll Call #34, HB 4214, increasing power of local emergency financial managers to cancel or amend existing government or school employee union collective bargaining agreements and other contracts (Y=Conservative, No=Liberal)
4/14/11, Roll Call #76, HB 4059, banning government worker union contracts that pay employees who are union officials for time they spend on the job conducting union business (Y=Conservative, No=Liberal)
4/14/11, Roll Call #77, Senate Concurrent Resolution 9, rejecting the state Civil Service Commission’s extension of health benefits to the live-in partners of state employees (Y=Conservative, No=Liberal)
4/28/11, Roll Call #91, HB 4480, repealing the exemption for state employee pension income from the state income tax (Y=Conservative, No=Liberal)
6/30/11, Roll Call #297, HB 4628, prohibiting public school employee unions from bargaining over staffing decisions, including assignments, promotions, demotions, transfers, layoffs, methods for assessing “effectiveness,” discipline, and merit pay systems (Y=Conservative, No=Liberal)
8/24/11, Roll Call #316, Senate Bill 7, prohibiting the state and local governments, public schools, and colleges and universities from providing employee health insurance benefits whose premiums cost more than $5,500 for a single person, $11,000 for a couple or $15,000 for a family plan, or, alternatively, requiring employees to contribute at least 20% toward the cost (Y=Conservative, No=Liberal)
A Summary of House Bill 4572 (H-7) as Reported From Committee
House Bill 4572 – CAP ON PUBLIC EMPLOYEE HEALTH INSURANCE
Sponsor: Rep. Joel Johnson
Committee: Oversight, Reform, and Ethics
Complete to 6-22-11
A Summary of House Bill 4572 (H-7) as Reported From Committee by the Non-Partisan House Legislative Analysis Section
House Bill 4572 would create a new law to be known as the Public Employer Health Insurance Cap Act. The new act would go into effect for the 2012 calendar year.
Under the bill, a public employer that offered health insurance to its employees through an insurance carrier, or through self-insurance, would be prohibited from paying more of the annual premium or illustrative annual premium cost (and any payments for reimbursement of co-pays, deductibles, or payments into health savings accounts or similar accounts used for health care, optical, or dental costs) than a total of $5,000 for single-person coverage, $10,000 for two-person coverage, or $15,000 for family coverage. The bill would require the state treasurer to adjust the maximum payment annually based on changes in the medical care component of the United States consumer price index (for the most recent 12-month period for which data were available).
The bill also specifies that the caps would not apply until the expiration of an existing collective bargaining agreement or other executed contract, if that agreement or contract was inconsistent with the caps. However, a collective bargaining agreement or other contract that is executed after the effective date of this legislation if it is enacted into law, could not include terms that are inconsistent with these requirements.
In addition, if a public employer chose not to, or failed to, comply with these requirements, then the public employer would be required to permit the state treasurer to reduce by 10 percent each statutory revenue sharing payment, and the Department of Education to reduce by 10 percent each payment of any funds for which the public employer qualified under the State School Aid Act during the period of non-compliance.
Finally, the bill specifies that these requirements would apply to all public employees to the greatest extent consistent with constitutionally allocated powers.
As used in the act, the term “health insurance” is defined to mean employee medical, dental, or optical benefits. The term “public employer” is defined to mean this state; a county, township, village, city, school district, or other political subdivision of this state; an authority; a public institution of higher education; or any other entity jointly created by two or more public employers.
FISCAL IMPACT:
State Government Fiscal Impact: Currently, for health, dental, and vision coverage for state employees hired prior to April 1, 2010, the state pays, per employee participant, $7,033 annually for employee only coverage, $13,954 annually for employee and spouse coverage, and $19,572 annually for family coverage. For health, dental, and vision coverage for state employees hired after April 1, 2010, the state pays, per employee participant, $5,665 annually for employee only coverage, $11,220 annually for employee and spouse coverage, and $15,799 annually for family coverage.
Based on FY 2010-11 data from the current health insurance plan offered by the state to employees hired prior to April 1, 2010, capping the state’s contribution to $5,000 for single-person coverage, $10,000 for 2-person coverage, and $15,000 for family coverage would result in an estimated annual savings to the state of $128.0 million Gross. Of that amount, roughly 50 percent of the savings, or $64.0 million, would be realized in the state’s General Fund. Remaining savings would be associated with employee compensation costs funded by federal or state restricted funding sources. For employees hired after April 1, 2010, capping the state’s contribution to $5,000 for single-person coverage, $10,000 for 2-person coverage, and $15,000 for family coverage would result in an estimated annual savings to the state of $2.2 million Gross and $1.1 million GF/GP. Combined, total annual savings to the state is estimated at $130.2 million Gross and $65.1 million GF/GP.
The attached tables (on Page 4) summarize combined health, dental, and vision premium costs for employees hired prior to and after April 1, 2010 under the current insurance plan structure and under the structure proposed in HB 4572 (H-7).
The estimated savings amount does not include any potential savings from capping the state’s contribution toward retiree health insurance costs. Also, the estimated savings amount does not assume any savings for employees who participate in the current employee and dependents (with no spouse) coverage category. Under the provisions of HB 4572 (H-7), there would be three categories of coverage as opposed to four categories of coverage under the current structure.
Savings to the state over time under HB 4572 (H-7) would potentially decrease due to the fact that an increased percentage of total state employees will have been hired under the new state health plan.
Local Government and Higher Education Fiscal Impact: Comprehensive data on the contributions made by employees and employers toward health insurance costs for local governments and public universities are not available. Therefore, no estimate can be provided as to the amount of savings those entities would realize under the provisions of HB 4572 (H-7).
Legislative Analyst: J. Hunault
Fiscal Analyst: Robin Risko
Kyle Jen
■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.
| Combined – Health, Dental, and Vision Premium Costs
For Employees Hired Prior to April 1, 2010 |
|||||||||
| Current | Under HB 4572 (H-7) | ||||||||
| Coverage Type | Number of Participants* | Employee Share | State Share | Total | % Employee Share | Employee Share | State Share | Total | % Employee Share |
| Employee Only | 10,426 | $742 | $7,033 | $7,775 | 9.6 | $2,775 | $5,000 | $7,775 | 35.7 |
| Employee & Spouse | 7,281 | $1,479 | $13,954 | $15,433 | 9.6 | $5,434 | $10,000 | $15,434 | 35.2 |
| Family | 17,063 | $2,056 | $19,572 | $21,628 | 9.5 | $8,629 | $15,000 | $23,629 | 36.5 |
| Combined – Health, Dental, and Vision Premium Costs
For Employees Hired After April 1, 2010 |
|||||||||
| Current | Under HB 4572 (H-7) | ||||||||
| Coverage Type | Number of Participants* | Employee Share | State Share | Total | % Employee Share | Employee Share | State Share | Total | % Employee Share |
| Employee Only | 785 | $1,293 | $5,665 | $6,958 | 18.6 | $1,958 | $5,000 | $6,958 | 28.1 |
| Employee & Spouse | 548 | $2,581 | $11,220 | $13,801 | 18.7 | $3,801 | $10,000 | $13,801 | 27.5 |
| Family | 1,284 | $3,577 | $15,779 | $19,376 | 18.5 | $6,376 | $15,000 | $21,376 | 29.8 |
* Number of Participants does not include the number of employees who are currently participating in the employee and dependents (no spouse) coverage category. The total number of these employees is 6,554 (6,095 hired prior to April 1, 2010, and 459 hired after April 1, 2010).
Updates on State Retirement Bills HB 4701-4702
View Q&As concerning HB 4701
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A special toll-free number (1-877-851-2521) has been set up which members can call and will be patched through to your legislator’s office.
Update 6/20/2011 – House Fiscal Agency Analysis of HB 4701 and HB 4702
Update 6/13/2011 – SEIU Local 517M is Absolutely Opposed to this Legislation.
All members are encouraged to visit our website at www.seiu517m.org for the latest information regarding this legislation. Basically, it changes the rules for state employees in the Defined Benefit Plan as well as the Defined Contribution Plan. If passed by the Michigan Legislature and signed by the Governor, it would discontinue the infamous 3% required contribution in to retirement “health savings” accounts. The problem is that it increases the contribution to 4% for current members of the Defined Benefit Plan (DB Plan) who choose to remain in that plan—and for those who don’t, it “freezes” their pension benefit at the September, 2011 level. Those state employees would then become members of the Defined Contribution Plan (DC Plan).
In addition, it also changes the rules for current and any new state employees in the Defined Contribution Plan. Employees, who have between 10 and 14 years of service with the state, will have the value of their service somehow “monetized” so that a cash payment can be made upon retirement from state service into a newly-established “Health Retirement Account” (HRA) from which they can pay for future health care costs. HRAs have been around for awhile—primarily in the private sector—and used mostly by employers as a method for reducing their employee health care expenses.
State employees with less than ten years of service will be treated similarly, except the retirement age for receiving this one-time lump sum “monetized” payment changes to 60 years old.
Finally, state employees with less than four years of service really get hit the hardest—they basically get a one-time lump sum payment of $2000 at retirement into an HRA for medical expenses.
WHY IS SEIU SO OPPOSED TO THIS CONCEPT?
SEIU Local 517M believes that this very complicated legislation breaks the commitment that was made to state employment back in 1997 when the Michigan Legislature made “transformational changes” in our retirement systems by basically shutting down our DB plans for all new hires. Michigan was then one of only two states to discontinue DB plans for their state employees—and even today, is one of only three that have even experimented with this idea. At that time, a Defined Contribution Plan was established for state employees that promised to pay 4% into the plan with an additional 3% dollar for dollar match. It also promised that health care plans would be vested after ten years, with state employees earning a premium split at the rate of 3% per year up to the maximum of 90% of the premium to be paid by the state (upon completion of 30 years of service).
State employees were told that this “transformational change” would save state taxpayers “tens or even hundreds of millions of dollars” within ten years of enactment. All state employee unions fought this change back in 1997—but we lost to the Governor Engler-controlled Michigan Legislature.
Now, less than fourteen years later, the Michigan Legislature is proposing to once again, to dramatically shift the ground under state employees, and once again make state service a less attractive career option for the “brightest and the best” choosing public service.
SEIU Local 517M has some of the best talent in the retirement arena reviewing this legislation, and preparing testimony in opposition to these changes. But more importantly than just SAYING NO to these changes, we are prepared to offer realistic alternatives that would make more sense for state employees—certainly be fairer-and still, save money.
OUR COMMON GOAL IS TO DEVELOP SOUND PLANS THAT PROVIDE RETIREMENT SECURITY FOR ALL OF OUR MEMBERS WHILE WORKING TO DEVELOP SMART, CREATIVE AND SOUND PLANS THAT WOULD PROVIDE RETIREMENT SECURITY FOR THE GENERAL WORKING PUBLIC AS WELL. IT CAN NOT BE A “WE VERSUS THEM” APPROACH. WE WILL LOSE THIS BATTLE IF WE LOSE THE PUBLIC’S SUPPORT FOR THIS CONCEPT. WE ARE ALL IN THIS TOGETHER.
Phil Thompson, Executive Vice President
Update – 6/9/11 by Capitol Services
The House Appropriations Committee will be taking these bills up Wednesday, June 15th at 9, for testimony only. In addition to the information in the preliminary summary below, two other points are worth mentioning:
1) HB 4701 would exclude payment for overtime services rendered on or after October 1, 2011 and
2) HB 4701 also allows state employees to return to work without adverse impact on their pensions, providing that the State Budget Director decides the retiree “possesses specialized expertise and experience” and that it is cost-effective.
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Update 6/9/11 – House Bill 4701 – OPEB Reform Legislation Introduced by Representative Bill Rogers
Summary Completed by the Office of State Representative Bill Rogers View summary here
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Update 6/8/11 – Preliminary Overview of HB 4701-4702
By Ellen Hoekstra, Capitol Services, Inc.
HB 4701 (Rep. Bill Rogers, R-Brighton) was introduced on May 31 and referred to the House Appropriations Committee. The bill amends PA 240, the State Employees’ Retirement Act. The legislation would affect state employees’ retirement benefits in the following ways:
- Requires defined benefit plan members to “choose” to contribute 4% of their compensation to the employees’ savings fund to provide for the amount of retirement allowance calculated on service after September 30, 2011, as described in Sections 35A and 50A. A member who makes this choice may also designate that this amount is to be paid only until the member’s “attainment date”—when he or she reaches 30 years or service or retirement, whichever occurs first. Years of service beyond 30 would be treated as tier 2, defined contribution years for members who made this designation. However, the designation is optional and members who choose to contribute 4% until retirement may have years of service beyond 30 used in the calculation of their defined benefit pensions.
- Sets an election and designation time period from July 1- August 31, 2011.
- Deferred members reemployed on or after July 1, 2011 and former nonvested members re-employed on or after that date will become qualified participants in Tier 2.
- Deferred and former nonvested members re-employed as described above, as well as members who do not choose to contribute 4% of their compensation will no longer be eligible for non-duty disability.
- Defined benefit plan members who do not elect to contribute 4% will have their pensions frozen at the current amount, with any future contributions going into “Tier 2”. These members will also have a limitation of 240 hours of accrued annual leave and service credit purchased prior to September 30, 2011 (or under a payment plan commenced prior to that date).
- Corrections and conservation officers may continue to qualify for the supplemental early retirement allowance as currently spelled out in the act for “covered employment” only if they elect to make the 4% contribution mentioned above.
- Employees who have less than four years of service and all newly hired employees would receive a lump sum one-time $2000 payment into their health savings accounts.
- Employees who were hired after 1997 and are in the Tier 2, defined contribution plan but have more than four years of service will also be shifted into health savings accounts, with the contributions to those accounts actuarially determined. Other qualifications include their being at least 60 years of age with 10 years of service or 55 with 30 years. Furthermore, there cannot be a separation from service longer than 60 months.
The legislation would cease the existing 3% contributions –on or before October 1, 2011. Contributions already made would be refunded to employees. The bill would replace the mandatory 3% contribution with the”voluntary” 4% contributions as of the first payday October 1, 2011.
The bill also appropriated $1.9 million to the Office of Retirement Services for administration of these changes.
* * * * * * * * * * * * * *
HB 4702 (Rep. Chuck Moss, R-Birmingham) was also introduced on May 31 and referred to the House Appropriations Committee. This bill amends PA 77, the legislation that was enacted last session to set up trust funds for retiree health care for employees in the state-operated pension plans. This bill is tie-barred to HB 4701 and sets up a system that would mandate contributions to such trust funds, as defined in the act governing each public pension system that would be paid out under the health reimbursement accounts set up by the legislation.
Although the only system immediately affected by this pair of bills is the State Employees Retirement Act, HB 4702 creates the structure to do the same thing for school employees, judges, state police, and legislators, should bills be introduced that would amend these acts. Reimbursable expenses include medical, dental, and vision to be paid for “past members or their funding account dependents under the applicable retirement act.” “Health reimbursement account dependents” are defined in the bill as a past member’s legal spouse and any unmarried children considered dependent under section 142 of the Internal Revenue Code.
The bill also permits the establishment of separate prefunding accounts by the relevant trustees. As permitted by law, voluntary contributions (and earnings on them) made by a member or past member who is deceased may be distributed to beneficiaries or the estate once eligible medical expenses are reimbursed. In addition to whatever mandatory contributions are required, members may make voluntary contributions from 1-5%. The vesting schedule for employer contributions is as follows:
- 50% after two years of service
- 75% after three years of service
- 100% after 4 or more years of service.
Following termination of employment, a trust must reimburse medical expenses to past members until their accounts are exhausted.
We will update this story when further information becomes available.