The Manhattan Institute last year commissioned polls in a number of states on public attitudes regarding government workers. One of the questions dealt directly with an issue the Michigan Legislature will face during a one-day session scheduled for Aug. 15: closing the school pension system to new employees, and instead giving them generous 401(k) contributions.
Here’s what 400 Michigan voters were asked about the issue in a poll conducted by Douglas E. Schoen, LLC between Aug. 29 and Sept. 5, 2011, and what they thought:
Do you favor or oppose moving all new public employees from a defined benefit plan to a defined contribution plan?
TOTAL FAVOR: 51 percent
TOTAL OPPOSE: 36 percent
Strongly favor: 30 percent
Somewhat favor: 20 percent
Strongly oppose: 19 percent
Somewhat oppose: 17 percent
Not sure: 13 percent
The Michigan Senate has already voted for a bill to do what the majority in this poll supported — to close the “defined-benefit” school pension system to new employees (Who Voted "Yes" and Who Voted "No"). The Michigan House has voted instead to keep enrolling new school employees into a somewhat less generous defined-benefit pension system (Who Voted "Yes" and Who Voted "No")
Michigan taxpayers are currently on the hook for $27.8 billion in unfunded school and state government employee pension liabilities, an amount that increased $6.1 billion in just the last year and $12.7 billion in two years. Under the Senate-passed pension reform bill, no new long-term taxpayer liabilities would be created when new school employees are hired. Under the House-passed version, every new hire creates new long-term taxpayer liabilities. Based on the state’s record of chronic pension underfunding, the likelihood is high that these, too, will eventually become unfunded liabilities.