Michigan

The fund: The Michigan Public School Employees Retirement System, affecting more than 290,000 employees.

The issue: Changing the retirement plan from a defined-benefit plan to a defined-contribution plan.

The expert: Chuck Agerstrand, MEA retirement consultant.

The story: In 1996, the Michigan legislation passed a bill to move state employees from a defined-benefit to a defined-contribution plan. All new school employees would be subject to the defined-contribution plan. The plan was to be implemented this year. At the same time, the state was trying to satisfy the Durant Supreme Court case, which ruled that the state must set aside additional funding for special education.

The outcome: MEA and MEA-Retired members were successful in repealing the 1996-passed legislation that called for defined-contribution and a graded health premium for all new members of the MPSERS system. Success came when they wee able to position the debate around the Durant case. "By leveraging the defined-contribution plan problem against the state legislature’s need to complete the Durant settlement," says Agerstrand, "we were able to make a significant gain for current and future members of our retirement system."

The challenge ahead: "With the upcoming November elections, the situation still needs watching,’ says Agerstrand. "Without a good mix in the state legislature, we could find ourselves in the same situation as before."

Source: NEA-Retired, March 1998