Rep. Howell: Reform plan will help ensure police, firefighters get retiree benefits they deserve

Categories: Howell News,News

In a legislative session that did not adjourn until 3 a.m. on Thursday, the Michigan House – with the help of Rep. Gary Howell of North Branch – approved legislation that will aid in the preservation of retirement benefits for police, firefighters and other local government employees.

The legislation will help identify local governments most at risk of bankruptcy or severe financial hardship due to underfunded retirement plans. The legislation sets up a system to help guide local governments to solid financial footing, so they can continue to pay for promised retiree benefits and public services. The goal of the legislation is to prevent the loss of retirement benefits such as what happened in the Detroit bankruptcy.

“I sponsored and voted for this legislation to protect the retirement benefits of our firefighters, police and other municipal employees,” Howell said after voting in favor of the package of bills. “They have worked hard to earn these benefits, and they deserve them. This legislation will start the process of making sure local governments are serious about doing what needs to be done to preserve these benefits.”

Michigan’s local government employee retirement systems have unfunded liabilities fast approaching $20 billion. The legislation working its way through the Legislature aims to help communities improve their plans’ finances.

The legislation utilizes recommendations from a task force assembled by Gov. Rick Snyder earlier this year. The task force included representatives of police, firefighters, local governments, and state legislators.

The reform legislation mandates some level of pre-funding to ensure every local unit has a start in paying for municipal employee retirement plans. The legislation creates a reporting system with uniform, realistic financial and accounting standards for local government retirement plans. An early detection system will help identify potential funding problems and allow local governments to act quickly to mitigate them. Communities will be vetted through a state treasurer’s fiscal impact evaluation and retirement systems will be flagged as underfunded when municipalities aren’t meeting set criteria to alleviate their debts.

Howell noted that the Lapeer County Board of Commissioners, the Lapeer District Library, and the Village of Columbiaville are local examples of “great foresight and fiscal responsibility” in the area of retiree benefits.

“I applaud their efforts,” Howell said. “They set good examples for local governments throughout Michigan to follow as they tackle this issue.”

The package of bills, including House Bills 5308 and 5309 which are sponsored by Rep. Howell, advances to the Senate for consideration.