The report from the Governor's task force (Retirement Reform Report) has been published and is available at www.mifop.com/report for your review. As you know, the FOP was one of the twenty appointed seats on the task force and I represented our members. The FOP had a second member appointed to the task force as Vice President Mike Sauger represented MAPO, which enabled us to have a strong presence and vote. The task force met over a period of four months to discuss the issues.
The focus of the meetings was to discuss possible ways to reduce the legacy costs associated to pensions and OPEB'S (other post employment benefits) which primarily are associated to health care. In the beginning the discussion appeared to focus on what cuts or changes could be made to various benefits plans to assist in this goal.
The first thing we countered with was that this has been going on for many, many years and no solution will correct it overnight. Further, no single plan or solution will work for the entire state. We believe, and were able to show, that local rule should continue to be the best direction to go. We pointed out that collective bargaining agreements in the last 10 years or so have begun to address the issue. We believe that this should be the route to continue. The task force was also apprised of some of the major changes in place as well as the problem associated to members retiring prior to being able to apply for Medicare.
The main focus of our position is, the benefits we earned upon retirement were not just given to us. We negotiated for and gave up other benefits to obtain them and we are entitled to them. We should not be penalized if poor management practices are an issue. It was pointed out, rightfully so, that should a city or county go into bankruptcy, an Emergency Manager can take them away. Our goal therefore is to try to assist in preventing a city or county to get to that level.
We agreed on a concept of reviewing agencies through a four step process to determine if they are attempting to address the issue. Should they get to a critical area, a new board would be able to assist. The Municipal Stability Board (MSB) would be available to provide guidance and options for the individual agency. However, in the original presentation that board was given far too much authority. We successfully argued against that authority and kept the board to a mediations type concept.
While we have a unified agreement on the final report it's not over yet. This will serve as a guide for the legislators to draft legislation in the fall to try and resolve the issues. We will be very diligent in watching for the legislation and we will contact you for help if needed.