Capitol News
May 11, 2025
Background — In 1987, the State Employee Retirement Act was amended to provide that defined benefit (DB) retirees receive a 3% or $300 (whichever is less) annual cost of living adjustment (COLA). Meanwhile, inflation has been 176.1 percent since 1987. Over 87 percent of current DB State retirees have reached the $300 cap, and that grows yearly with the addition of recent retirees with higher pensions and retirees reaching the $10,000 plateau for the full 3 percent annual COLA. Last year’s appropriation act provided for the cost of an Actuarial Study about three potential options to improve the COLA. These were described in the April 2025 SERA-Nade. Readers can now access the Actuarial Study on the Michigan SERA website at www.mi-sera.org.
Two Best Options — The two best options for current and future DB retirees are Proposal D (page 9 of the Actuarial Study) and Proposal E (page 11).
- Proposal D would replace the current 3 percent or $300 cap with a COLA based on the Consumer Price Index for Americans 62 years of age or older (CPI-E) applied to current pensions, including past accumulated (not compounded) COLAs. Problem: the actuaries calculated that the average CPI-E over 30 years has been 2.45 percent. The study pointed out that in some years, this would produce a smaller COLA for those with pensions below $10,000 than the current formula of a straight 3 percent. If this option were adopted, we would want to see no reduction in the 3 percent COLA for this group.
- Proposal E would replace the current 3 percent or $300 cap with a cap of $808 which would be adjusted annually according to the CPI-E applied to current pensions, including past accumulated (not compounded) COLAs. This would give a substantial boost for lower pension recipients and keep future COLAs rising with inflation. The disadvantage is that higher income recipients benefit to a much smaller degree.
Meeting With ORS — SERA representatives met with Office of Retirement Services (ORS) representatives on Monday, April 28, for the purpose of clarifying some technical aspects of the Actuarial Study and 13 questions were posed in writing. ORS will be getting back to us with answers that need actuary involvement. We learned that ORS has not taken a position on any of the options for adjusting the defined benefit State retiree COLA and intends to stay neutral. Additionally, we were assured that the 4%/$400 cap option wasn’t their idea.
Take Action — The Fiscal Year 2026 appropriations process is underway right now. Now is the time for those interested in an improved COLA for the future to contact your own State Senator or State Representative to inform them about the problem of our small and static COLA for the last 38 years and that there is an Actuarial Study in the hands of the Appropriations Committees’ Chair and Vice Chairs to project costs for the State budget process.
The average annual State employee pension in 2024 was $25,425 according to the Annual Comprehensive Financial Report. Combined with Social Security, which is usually about half of the pension amount, the average State employee retiree is living on a little over $37,000 a year plus any savings.
For comparison, in 2023 the per capita income in Michigan was $61,144 and in the United States $69,810, according to the U.S. Department of Commerce, Bureau of Economic Analysis.
LEGISLATION ON THE MOVE
SERA supported in Committee hearings or is following closely several bills of interest to seniors that were approved by the originating chamber during April and early May and now are in the second chamber for consideration.
Medical Examiners — Passing the Michigan House 106 – 2 on April 22 were House Bills (HBs) 4077 and 4078 which would simplify and speed up the death certificate production process. You cannot have a funeral, bury or cremate the individual, access life insurance funds, or proceed with legal affairs to settle an estate without a death certificate. The bills modernize the medical certification of death to address significant frustrations with the length of time it takes to obtain medical certification on a death certificate. Both bills were reintroductions of legislation that passed the House last term but died in the Senate during lame duck.
Voter Registration — Under HB 4136, which passed the House 108-2 on May 6, the Secretary of State will have to provide voter registration applications to those who issue resident hunting, fur harvester, or fishing licenses.
Officeholder Disclosure Rules — Three bills to expand officeholder financial disclosure requirements for spouses and candidates for public office and exempt tickets to charitable events from required disclosure were approved by the full Senate on April 24. A legislatively initiated ballot proposal passed by voters in 2022 requires financial disclosure but left it up to legislators to flesh out details. During 2024, there were continued questions and concerns among elected officeholders and others on how and what to report, prompting an interpretive statement from the Secretary of State and an Attorney General opinion on issues related to the law.
Senate Bill (SB) 99 amends the Public Officers Financial Disclosure Act to create a new exemption on reporting an officeholder’s spouse’s name and employer if the spouse receives at least $1,000 per year. SB 100 amends the Candidate for Office Financial Disclosure Act to narrow reporting for candidates to only include those who intend to appear on the ballot during the election cycle. SB 101 provides that an elected official may continue receiving free or reduced-price tickets to a charity event and to “a conference or educational event if the subject matter of the conference or educational event is directly connected to the duties of the public official who is provided the admission.” Similar legislation cleared the Senate last December but died in the House.
Vulnerable Adult Bills Advance — The full Senate passed the vulnerable adult package of legislation on April 16. Passing the Senate unanimously were SBs 112 – 114. The bills prohibit embezzlement from a vulnerable adult in the racketeering statute, provide penalties and methods for property recovery for embezzlement from vulnerable adults and the estates of vulnerable adults, and establish vulnerable adult multidisciplinary teams.
SB 111 would create personal protection orders specifically to address situations involving financial exploitation of vulnerable adults, as well as threats or acts of violence against them. It would also allow court officers to serve Personal Protection Orders (PPOs). It passed 19-18 along party lines. Republicans said the personal protection order language in the bill was too broad and would conflict with the Second Amendment rights of individuals subjected to PPOs.
Health Insurance Coverage Bills — Passed in the Senate in April are SBs 107, 135, and 144, all related to health insurance coverage. SB 107 requires health insurance to cover immunization agents and certain laboratory tests administered and ordered by a pharmacist, not just a doctor.
SB 135 is a codification of some aspects of the federal Affordable Care Act. According to Gongwer News Service, the bill would allow retiree-only health insurance policies to place lifetime or annual limits on the dollar value of essential health benefit coverage and exempt non-grandfathered health plan coverage from the requirement to provide essential health benefits like hospitalization and pregnancy care. SERA opposed this bill in committee.
SB 144 eliminates a doctor’s prescription requirement for physical therapy treatment and makes other modifications to the practice of physical therapy.
OTHER NEWS
School Millage Results — The May 6 local elections are drawing concern from educators. Michigan approved nearly $900 million in school bonds, while rejecting half of the school bond proposals on the ballot statewide. Statewide, voters approved 22 of 45 requests, a success rate of 49 percent, below the 60 percent passage rate in the May 2024 election and the 62 percent passage rate in the November election, according to a Bridge Michigan analysis.
Stabenow Building — Constitution Hall where the old Civic Center used to be is now officially renamed by Executive Order the Deborah A. Stabenow Building in honor of the 50 years of public service by former U.S. Senator Debbie Stabenow.
State Income Tax Stays at 4.25% — Michigan’s income tax will remain at 4.25 percent for the 2025 tax year. A calculation required by law was published May 1 by Treasurer Rachael Eubanks, House Fiscal Agency Director Mary Ann Cleary, and Senate Fiscal Agency Director Kathryn Summers that determines whether the income tax rate will change. A 2015 law, included as part of tax increases to fund road work, requires the income tax to decline if revenue growth exceeds inflation combined with economic growth.
Editor’s note: Mary Pollock is the Lansing SERA Chapter and SERA Coordinating Council’s Legislative Representative. She may be contacted at michigansera@comcast.net.
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