96 ex-Mich. troopers could get hike in $16,000 pensions
Lansing — A group of 96 retired state troopers who left the force three decades ago would see their annual pension checks boosted to a minimum of $16,000 under two bills advancing in the Legislature.
The legislation seeks to end what the sponsors believe is an inequity for former troopers who retired before Oct. 1, 1986, but don't qualify for Social Security benefits from their service with the Michigan State Police.
Their pensions did not have an annual cost-of-living increase clause and were smaller than the 60 percent of final pay that a state trooper who retires today can collect for the rest of his or her life.
The two bills, which cleared the Senate on June 17 in a unanimous vote, are unusual because lawmakers rarely tinker with the guaranteed pensions of retired government employees — much less give them a raise. And the state police pension fund is just 62 percent funded.
House Appropriations Chairman Al Pscholka plans to scrutinize the bills closely before letting them advance to the House floor.
"We'll take a look at it, but it's probably not going to be a top priority," said Pscholka, R-Stevensville. "I am concerned about setting a precedent."
There are 23 retired state troopers with pensions of $12,000 or less per year, 50 retirees with pensions ranging from $12,000 to $14,999 and another 23 who collect between $15,000 and $16,000 annually, according to the state's Office of Retirement Services.
"What we want to do is bring them up to $16,000 so they are above the federal poverty level because this is their Social Security," said state Sen. Mike Nofs, a Calhoun County Republican and retired state trooper himself.
Nofs and Sen. Tom Casperson, R-Escanaba, secured a special $330,000 appropriation for the Michigan State Police in the state's next fiscal year budget to pay for the boost in pensions of the elderly retirees and their survivors.
The cost of the pension increase is expected to decrease in future years as the retirees pass away.
"The youngster in this group is about 85," said Diane Garrison, a retired post commander and chair of the Michigan State Police Troopers Association's retire committee. "Every year (the cost) will diminish as these people go to the blue goose in the sky."
But the group of 96 retired state troopers aren't the only retired state employees with meager pension checks hovering at or below the federal poverty line, which is $15,930 for a married couple without dependent children.
About 22,000 retired state employees and about 91,000 retired public school employees are collecting annual pensions of $16,000 or less, according to the state's Office of Retirement Services.
There also are 90 retired judges collecting less than $16,000 annually through their separate pension system, according to the state retirement office.
Across the entire state police pension system, there are 242 retirees with pensions of $14,400 or less, including some of the troopers who retired before Oct. 1, 1986, according to the Office of Retirement Services.
What makes the retired state troopers special, Nofs and Casperson said, is they never paid into Social Security for their work at the State Police and may have faced Social Security benefit penalities in any post-retirement jobs.
"We've got troopers who are under the poverty level with their retirement," said Casperson. "Just give them some dignity at the end here. Age expectancy is not long."
In 1996, all troopers who retired before Oct. 1, 1986 were given a 10 percent across-the-board pension increase, said Caleb Buhs, spokesman for Michigan Department of Technology, Management and Budget, where the retirement office is housed.
Post-1986 retirees have been given an annual increase of 2 percent of their pension or a maximum of $500, Nofs said.
Senate Bill 21 would extend the annual cost-of-living increase to the remaining 96 retired troopers.
"I think they fell into an unexpected trap," Casperson said of troopers who retired more than 29 years ago.
Casperson and Nofs had considered seeking a $300 per month pension increase for all living former troopers or survivors who retired before Oct. 1, 1986. But that would have cost $2.5 million more in annual contributions, Nofs said.
The 62 percent funded Michigan State Police Retirement System's pension assets were valued at $1.1 billion at the end of fiscal year 2013, with 2,963 retirees or survivors drawing pension, according to its 2014 comprehensive annual financial report.
Casperson's bill sets aside $5,000 for an actuarial study of the long-term financial impact of increasing the pension checks of the 96 retirees and giving them cost-of-living increases.
The legislation has been introduced three times since 2010, but has never gained traction in the past three Legislatures.
But once it was limited to the small group of retirees collecting pension checks under the federal poverty line, Nofs said, "everyone else got more comfortable with it."
The Senate unanimously passed the two-bill package — Senate Bills 21 and 22.
"It's certainly not going to make them rich by any means," Casperson said. "But it's certainly a nice gesture."
But Pscholka is wary of rushing to the aid of one group of pensioners.
He noted the Legislature just last year voted to accept a settlement in Detroit's bankruptcy, which led to varying reductions in pension benefits for some 32,000 city pensioners.
"We just had changes made in the Detroit pensions," he said. "We will tread carefully."