Rep. Calley vote calls for system to avoid financial trouble at local level, protect retirees

Categories: Calley News,News

State Rep. Julie Calley today voted to pass a multi-bill House reform plan aimed at protecting the retirement benefits for police, firefighters and other local government employees in Michigan.

The plan uses recommendations from a task force assembled by Gov. Rick Snyder earlier this year. The task force explored Michigan’s underfunded local government employee retirement systems and urged changes to help reduce unfunded liabilities, which are fast approaching $20 billion statewide.

Heeding the concerns surrounding this problem and following up on recommendations supplied through the task force, the House plan calls for greater financial transparency and standardized data collection to provide an early detection system for both local governments and the state when situations of underfunding arise.

“The work completed by this task force, with input from local representatives and state officials, clearly illustrated the scope of this problem,” said Calley, of Portland. “It’s important for our police officers and fire fighters that benefits promised to them are there when they need them. In some areas of the state, that is in doubt. I cast my vote on these bills to see those benefit plans funded.”

The detection system outlined through the task force recommendations should lessen the chances a community approaches bankruptcy – an outcome in which a federal bankruptcy judge would determine the fate of post-employment benefits for local government retirees. Communities will be vetted through a state treasurer’s fiscal impact evaluation and retirement systems will be flagged as underfunded when municipalities are not meeting set criteria to alleviate their debts. The system will provide local governments with analyses so localities can act quickly to mitigate their funding issues. In addition, transparency will help residents determine the employee related liabilities of a local board.

House Bills 5298 and 12 companion bills advanced to the Senate for further consideration.