State Rep. Thomas Albert today requested that the Michigan attorney general weigh in on when the Office of Retirement Services (ORS) is required to implement changes that will improve the financial health of the state’s school employee retirement fund, protect retiree benefits and improve classroom funding.

Albert, of Lowell, seeks an attorney general opinion related to lowering the payroll growth assumption used in the Michigan Public School Employees Retirement System.

In 2018, both the MPSERS Retirement Board and the state Department of Technology, Management and Budget adopted a 2.75% payroll growth assumption.  ORS claims it does not yet have to lower the payroll growth assumption from its current 3.5% because of Public Act 181 of 2018, a law sponsored by Rep. Albert.

Albert – who wants the payroll growth assumption lowered quickly – says ORS is misinterpreting law by claiming rates can’t be lowered until they are automatically mandated to do so in 2022. The artificially high payroll growth assumption results in a chronic underfunding of the retirement system, which leads to soaring debt and puts retiree benefits at risk. MPSERS-reported payroll has actually been steadily declining by an average annual rate of more than 2% for more than a decade.

“The Office of Retirement Services has no legal justification for their interpretation of the law,” Albert said. “Failing to lower the payroll growth assumption now will likely divert hundreds of millions of dollars away from an already broken pension fund.  These may sound like small percentages involved, but the consequences are huge.

“Our teachers have earned these benefits and we must save responsibly,” Albert said. “The alternative is to continue to pass on debt to our children – and we simply cannot allow that to happen.”

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