October 7, 2018
VOTING IN MICHIGAN
On November 6 we will be selecting a new Governor, Attorney General, Secretary of State, and voting in contested races for the U.S. Senate and 14 members of the U.S. House of Representatives, 110 State Representatives, 38 State Senators, statewide education boards, county commissioners, judicial races including the Michigan Supreme Court, community college and local school district races, three statewide ballot proposals, and any local government ballot issues.
There will be no straight-party ticket voting available this year due to a court decision, so be sure to plan on the extra time it will take to vote the entire ballot, including all the non-partisan and ballot issue portions at the end and on the reverse side of the ballot. The League of Women Voters offers some information about candidates and issues at www.vote411.org.
The last day to register to vote or change your voting address in Michigan was October 9 for the November 6 election. You can check your voter registration status by calling your local city or township clerk and at the Michigan Voter Information Center Web site www.michigan.gov/vote.You can also view there your sample ballot, request and track your absentee ballot, find your polling place, and find answers to frequently asked questions about voting.
Absentee ballots — Absentee ballots are available to eligible voters by submitting an application form by mail or in person. You can obtain an application at your clerk’s office or download one at www.michigan.gov/vote. You can apply beginning 75 days before an election but the application if mailed must be received by your clerk by 2 p.m. the Saturday before the election. Your application to obtain an absentee ballot in person must be received by your city or township clerk by 4 p.m. the Monday before the election. Your completed absentee ballot must be received by your clerk’s office no later than 8 p.m. on election day. Every clerk is required to be open on Saturday before election day to distribute and receive applications for absentee ballots and a voting machine is there to cast a ballot. Many clerks have drop boxes to receive absentee ballots to help you avoid postage costs.
Election Day Voting — Polls are open from 7 a.m. to 8 p.m. Find your polling location from your Voter Identification Card, by calling your local city or township clerk, or at www.michigan.gov/vote. You have the right to vote if you are in line when the polls close. You have the right to an accessible polling place and accessible voting machine. If your polling place is not accessible, contact your city or township clerk to find an alternative site to vote. You can also send someone into the polling location to request curbside voting. You can bring one or more people to assist you in the polling place as long as the person is not your employer, an agent of your employer, or an officer or agent of your labor union. You can request assistance from election workers at the polling location.
Michigan law permits you to vote by either showing a photo ID or signing an affidavit form stating that you do not have a photo ID with you.
The pension tax (or more correctly the 2011 law eliminating income tax exemptions for most retirement income) has emerged as one of the top issues in the Michigan gubernatorial campaign! Democrat Gretchen Whitmer dedicates a whole commercial to her opposition to the retirement tax and a spokesman for Republican Bill Schuette’s says Schuette is for elimination of the pension tax, too. To fulfill these campaign promises, whoever is elected would have to find replacement revenue for the $350 million+ (in 2012 dollars) collected or reduce state programs in an equivalent amount. The legislature would also have to go along with the changes. So although we are a long way from eliminating the pension tax, it is great to see it discussed and debated.
Governor Snyder’s original tax overhaul proposal eliminated the exemption entirely, but after a vigorous outcry from retirees including SERA, the final 2011 tax overhaul treated retirement income differently depending on the age of the recipient. Still, younger retirees born after 1945 were blindsided by the increase in their tax liability without warning or ability to plan for the extra expense.
MICHIGAN INVESTMENT BOARD
Oversight of $70 billion of Michigan retirement funds, including the state employee retirement fund, was recently reorganized in Executive Order 2018-10 issued by Governor Rick Snyder on September 27. The EO abolished the current Investment Advisory Committee and established a new State of Michigan Investment Board. The Board will meet quarterly and is subject to the Open Meetings Act.
The EO switches the state pension plan governance structure from a sole fiduciary model (the State Treasurer) to a board model to act as the investment fiduciary and custodian of the Retirement System’s assets. The Board will be composed of the State Treasurer serving as Board Chair without designee, the State Budget Director and three gubernatorial appointees. The three gubernatorial appointees must have knowledge or experience in securities investment, pension administration, or pension law, past or current fiduciary oversight experience of investment pools similar to the Retirement System, or extensive professional financial knowledge and experience. They will serve for a term of four years.
The Governor’s press release announcing the change asserts the new structure modernizes the governance structure to be similar to nearly all other states, establishes experience requirements for board members, and addresses potential conflicts of interest and ethics standards. The Board will serve without compensation but are appointees are eligible for reimbursement for travel expenses.
A change SERA has requested in the past came to fruition in the EO: the Investment Board will provide more transparency over defined contribution plan assets, in both the approval of the array of 401(k) investment options and performance reporting for Defined Contribution Plan participants. SERA will continue to monitor and report on Investment Board activities.
Double-dipping — Two active bills would permit double-dipping and increased financial pressure on the state employee pension fund.
House Bill 6097 would amend the State Employees’ Retirement Act to allow state retirees to return to state work without forfeiting their retirement benefits if and while hired indirectly through a third-party contract.
Public Act 95 of 2007 eliminated the practice of a state employee retiring and then returning to work for the state, drawing both retirement benefits and a salary if directly re-employed or indirectly hired through a third-party contract. Public Act 185 of 2010 expanded the benefit suspension to include employment with the state indirectly as an independent contractor.
Subsequently there have been amendments to the statute to make exceptions for health care workers in the Department of Corrections; former state employees of the Department of Attorney General with specialized expertise and experience; firefighters in the Department of Natural Resources; and psychiatrists for state-operated psychiatric hospitals.
The House Fiscal Agency analysis states that House Bill 6097 could increase costs to the state by an indeterminate amount. By allowing retirees to return to work without forfeiting retirement benefits, the bill would create an incentive for employees to retire earlier than they might have otherwise, knowing they can earn both current compensation as well as a pension and retiree health benefits. When retirees retire earlier than anticipated under the retirement system’s actuarial assumptions, it increases the unfunded liabilities in a pension system. Increased unfunded liabilities would be borne by the state through increased departmental costs for the State Employees’ Retirement System (SERS), which are assessed across all state departments as an equal percent of payroll. Currently that assessment is about 23 percent for each employee eligible for the defined benefit retirement system.
At the House Committee on Transportation and Infrastructure hearing on September 25, the sponsor and a representative from Mannik and Smith Group, a privately owned engineering and environmental consulting firm with offices throughout Ohio and Michigan, testified in favor of the bill. The Michigan Society of Professional Engineers and the American Council of Engineering Companies of Michigan put in cards of support. The Office of Retirement Systems testified but was neutral on the bill. The bill is still in Committee for additional consideration.
The SERA Coordinating Council Executive Committee at its October 5 meeting took the position that it would support the bill if there were amendments to narrow its scope to Department of Transportation retirees with critical and specialized expertise and experience. The Committee noted that current state salaries are sometimes not competitive with the private sector, putting pressure on the retirement system to help finance employee retention efforts.
Corrections retirees — House Bill 5411 would amend the State Employees’ Retirement Act to align the definition of a covered position with actual corrections employee classifications. Employees in covered positions, those responsible for the care and supervision of prisoners, are eligible to retire early and receive supplemental retirement benefits until they reach age 62. A 2015 audit found that 8 employees and one retiree were affected by the oversight. The bill has passed the House and has been reported out of the Senate Appropriations Committee so is now ready for final Senate passage.
Rx drug price transparency — Patients nationwide will benefit with the passage on October 4 of the “Know the Lowest Price Act,” (S. 2553) introduced in the U.S. Senate by Senator Debbie Stabenow (MI). The legislation is expected to be signed into law by President Trump. Currently, health plans and Pharmacy Benefits Managers like Optum can insert gag clauses into their contracts with pharmacists prohibiting them from disclosing to consumers when it would cost them less to pay out-of-pocket for a drug than it would to use their insurance coverage. S. 2553 will prohibit these contract arrangements between Medicare private plans, PBMs and pharmacies — and help save us money on our prescriptions.
Editor’s note: Mary Pollock is the Lansing SERA Chapter and SERA Council’s Legislative Representative. She may be contacted at 1200 Prescott Drive, East Lansing, MI 48823-2446; Phone 517-351-7292; E-mail email@example.com.
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