Michigan lawmakers look to plug the big gaping hole in government liability.
It could have been better however. It was the year that Governor Engler signed off on pension plan changes for state employees, but not including the school retirement system. For those it did affect, It adjusted the way in which pensions are funded from defined outcomes at high risk for taxpayers, to defined contribution with real ownership to the recipients.
It also saved the state billions in the last 2 decades.
The change to the Michigan State Employees’ Retirement System saved the state an estimated $2.3 billion to $4.3 billion in unfunded state employee pension liability from 1997 to 2010, according to the report, authored by public pension expert Rick Dreyfuss.
Seven years later we are still benefiting (no pun intended) from this change.
This 20 year anniversary could well produce the finishing touch and allow Michigan to move toward a predictable liability scenario for good. School employees somehow remained outside of the course correction in 1997. House Bill 4647 and Senate Bill 0401 being nearly identical, provide the mechanism for the fix to that problem that has been long overdue.