Michigan House Bill HB5002

Michigan 2023-2024 Regular Session

• Introduced: 9/14/23
• Refer: 9/14/23
• Report Pass: 9/19/23
• Engrossed: 9/19/23
• Refer: 9/20/23

Caption

Retirement: public school employees; unfunded actuarial accrued liability contribution amount for a university reporting unit; modify. Amends sec. 41 of 1980 PA 300 (MCL 38.1341).

Impact

The impact of HB 5002 is significant as it seeks to stabilize and improve the financial reliability of the retirement system for public school employees. By establishing a methodology for calculating contribution rates linked to actuarial evaluations, the bill aims to ensure that funding for retirement benefits is both adequate and manageable over the long term. This could lead to improved financial health of the retirement fund, reducing future liabilities and ensuring timely payments to retirees.

Summary

House Bill 5002 seeks to amend the 1980 Public School Employees Retirement Act by specifically addressing the unfunded actuarial accrued liability contribution amounts for university reporting units. The bill outlines a systematic approach to determining annual contribution rates based on actuarial valuations that take into account several risk assumptions established by the state treasurer in consultation with actuaries. This is intended to create a more sustainable financial framework for the retirement system that services public school employees in Michigan.

Sentiment

The sentiment around HB 5002 appears to be generally supportive among stakeholders involved in public education and employee retirement, as it endeavors to address longstanding financial challenges within the retirement system. Proponents argue that these measures will mitigate risks associated with fluctuating actuarial assumptions and promote a more reliable retirement benefit structure for educators. However, there may be contention from those advocating for immediate reforms or who believe there should be a more substantial overhaul of the retirement system.

Contention

While largely anticipated to benefit the financial structure of the retirement program, HB 5002 may face contention over the specifics of how contributions are calculated and the parameters defining risk assumptions. Critics could raise concerns about the appropriateness of the methods used for valuation and potential long-term impacts on funding adequacy. Additionally, the distinction between university reporting units and other public school employee classifications may also elicit discussions, questioning whether the bill adequately reflects the needs of all public school employees.