MPSERS CHANGES H.B. 4530: COMMITTEE SUMMARY
House Bill 4530 (as passed by the House)
Sponsor: Representative Lee Gonzales
House Committee: Appropriations
Senate Committee: Appropriations
Date Completed: 5-08-07
CONTENT
This bill would make two changes to the Michigan Public School Employees' Retirement System (MPSERS) for fiscal year 2006-07. The first change would revalue MPSERS assets according to their actual market value as of September 30, 2006, for the purposes of determining the required amount of employer contributions. Assets are currently valued by a five-year smoothing process.
The second change would allow for an interest-only payment on the unfunded actuarially accrued liability (UAAL) for FY 2006-07, deferring the remaining payments for this fiscal year. For FY 2006-07, the UAAL contribution is 4.5% of the UAAL.
MCL 38.1304 et al.
FISCAL IMPACT
The revaluation of MPSERS assets would save the School Aid Fund $175.6 million. Savings to community colleges and universities would reduce General Fund expenditures by $5.4 million and $1.3 million, respectively.
The interest-only payment would create savings of $86.4 million in the School Aid Fund and $13.7 in the General Fund ($10.9 million for community colleges and $2.8 million for universities).
Fiscal Analyst: Kirk Sanderson
Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. 4530/0708