Graden: Pension Reform Saves Saline $800,000

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 08/16/2012 - 02:52


Saline Area Schools Superintendent Scot Graden tweeted that pension reform approved by the Michigan State Senate and Michigan House Wednesday will save the district $800,000 this year.

The Saline Board of Education earlier this year passed a resolution urging legislators to reform the school pension plan. Districts were set to pay 27 percent of their payroll costs toward funding the Michigan Public School Employee Retirement System. That number have jumped to 31 percent next year had the new legislation not been approved. The same number was at 12.6 percent in 2001-02.

According to, the new plan doubles health insurance premiums for retirees and caps school district contributions.

New school employees will no have the option to receive an would have the option to receive an existing hybrid defined-benefit, defined-contribution plan or a straight defined contribution 401(k) account. The new employees (hired after Sept. 4, 2012) will also receive no health benefits in retirement but would receive matching employer contributions up to 2 percent of compensation deposited into a 401(k) account.

:Lawmakers will also study the feasibility of moving completely from a defined benefit system to a defined contribution system.

In Saline, the district was counting on some form of pension legislation, along with the concessions already given back by the teachers and support staff, to balance the budget and eliminate the structural deficit.

Here's what's being said about the legislation:

"Schools across Washtenaw County and the state of Michigan are breathing a sigh of relief, knowing that millions of additional dollars will be available to improve education. It's a massive reform effort that will allow local schools to put more money into our classrooms to benefit our students." -- Mark Ouimet, R-Scio Township. 

“This bill doesn’t solve the financial problems of our pension system that have been exacerbated by the privatization of public schools. Instead, SB 1040 is a backdoor pay cut for teachers that will draw even more resources out of the classroom. How can we expect our teachers to focus on educating children when the legislature is constantly changing their pay, their retirement and their health care? Those are supposed to be local decisions.” -- Jeff Irwin, D-Ann Arbor



Tran Longmoore's picture
Tran Longmoore
Tran Longmoore is a veteran community journalist. He is founder and owner of He is co-publisher of The Saline Post weekly newspaper. Email him at [email protected] or call him at 734-272-6294.

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