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LANSING, Mich. - The State of Michigan Retirement Systems lost money by investing pension funds in American International Group Inc., according to a report in the Detroit Free Press, and now Michigan will lead a lawsuit seeking "maximum recovery" on behalf of investors.
State Treasurer Robert Kleine and Attorney General Mike Cox said that Michigan has been named lead plaintiff in a class action lawsuit against the firm, the report said. The retirement office invested in AIG on behalf of more than 600,000 public school employees, state police, state employees and Michigan judges and their beneficiaries, according to the Free Press.
AIG was heavily invested in credit default swaps, which are insurance-like contracts tied to subprime mortgage-backed securities and other risky debt, the article said. The lawsuit accuses AIG of illegally misleading investors about the scope and risks of those investments.
Kleine and Cox said Michigan will manage litigation on behalf of a class of AIG stock and bond purchasers, negotiate potential settlement terms and maximize recovery for the class, the Free Press reported.
The article did not detail the amount of the investment or loss, but a press release issued by Cox's office said that the retirement system holds combined assets of $60 billion and is one of the largest pension systems in the nation.
The release noted that Michigan also was named lead plaintiff in a national class action against Bear Stearns for nearly $62 million in losses to the retirement system and that Cox also has brought action against Tyco for $81 million in losses and HealthSouth for $33 million in losses, all to the state pension fund.
SOURCES:
The Detroit Free Press, "Michigan is lead plaintiff in AIG securities case,"
March 20, 2009
Office of the Attorney General, "Michigan to lead national suit against AIG,"
March 20, 2009
FURTHER READING:
Michigan Education Report, "It's time to get serious about school employee pension reform,"
Feb. 23, 2007
GRAND BLANC, Mich. - Teachers in the Grand Blanc School District would pay more for prescription medication while the district would offer an early retirement incentive under proposed contract amendments, according to The Grand Blanc News. The moves are intended to help the district cut $3 million from its 2009-2010 budget, The News reported, and will have the effect of protecting jobs for lower-seniority teachers.
Pending school board approval, the district will offer long-time teachers a retirement payout of $30,000 to $50,000, based on seniority and paid over two years, according to The News. Under a separate agreement, teachers will pay $10 or $20 for prescription medication, up from $5 or $10. The sides also agreed to lengthen the school day by 5 minutes but cut one full day of school, intended to save money on operations, The News reported.
"The contract isn't even close to being up, but when you're faced with the certainty of losing teachers ... we felt compelled to sit down with them," teachers union Vice President Matt Hugo told The News. "Our whole effort in negotiating was to preserve the new teachers."
Most of the savings - $600,000 of a projected $800,000 - would come from the higher medication charges, school officials told The News. School construction and improvement plans also may be tabled as a cost-saving measure, the report said.
SOURCE:
The Grand Blanc News, "Grand Blanc teachers union and district strike a deal to cut budget and save jobs,"
March 20, 2009
FURTHER READING:
Michigan Education Digest, "Teachers agree to insurance changes, get pay raises,"
Oct. 27, 2008
STANTON, Mich. - School board members in Central Montcalm Public Schools want to know how much a retirement incentive plan would cost the district before giving final approval, according to The Greenville Daily News.
The district offered a retirement package to teachers last year, but the new version includes support staff and community education teachers, according to The Daily News. In general, it would offer long-term employees a payment equal to half their base salary, distributed over two years, The Daily News reported. Support staff would receive a one-time $2,500 payment, the article said.
The board voted to approve developing the plan but wants final say over how many employees can participate, which determines the final cost, according to The Daily News.
While the plan would save the district money up front by replacing retirees with newcomers at lower salaries, that savings would disappear within six to eight years as new employees move up the salary scale, Superintendent Jacob Helms told the board, The Daily News reported.
Helms said 15 to 18 employees qualify for the plan based on its guidelines, the article said.
SOURCE:
The (Greenville) Daily News, "CM school board OKs exit packages,"
March 17, 2009
FURTHER READING:
Michigan Education Digest, "Retirement costs headed up,"
March 9, 2009
Mackinac Center for Public Policy, "The First Two Letters of MEA,"
March 16, 2009
MUSKEGON, Mich. - Four nonprofit groups are still in the running to receive a free building from the Muskegon school district, according to The Muskegon Chronicle.
The district has tried unsuccessfully to sell two vacant school buildings and now plans to give them away, The Chronicle reported. The Muskegon Heights and Muskegon housing commissions, the local Lions Club, and West Michigan Therapy are the four finalists; representatives from each will be interviewed in April, according to the report.
Their varied plans call for using the buildings as low-income housing, a substance abuse treatment center, or activity centers for the young, the elderly or both.
The district will save approximately $70,000 on utilities and an unspecified amount on maintenance by giving away the facilities, The Chronicle reported.
Board Trustee Cindy Larson said she's interested in exploring whether organizations would be able to share the buildings, the report said.
SOURCE:
The Muskegon Chronicle, "Four still in running for free Muskegon school,"
March 18, 2009
FURTHER READING:
Michigan Education Report, "Schools for sale,"
Aug. 15, 2007
PHILADELPHIA - Charter public school students may be more likely to graduate and attend college than students in conventional public schools, though their overall academic performance is not necessarily better, according to a newly released study by the RAND Corp., reported in the Philadelphia Inquirer.
Michigan State University associate professor Ron Zimmer was among the lead authors of the study.
The authors examined charter schools in eight cities and states (Michigan was not among them) and concluded that charter middle school students who go on to charter high schools were 7 percent to 15 percent more likely to graduate. While charter high school students did not post better test scores, they were 8 to 10 percent more likely to attend college, according to the Inquirer. High school results were based on Florida and Chicago only because most states do not track students beyond high school, according to the Inquirer.
"These are some of the most positive results so far for charter schools," Zimmer said. "It may suggest that evaluations up to this point have not been broad enough to capture what's going on in charter schools."
In other areas, Zimmer and his colleagues reported that academic gain on average is not higher among charter students than those in traditional schools, as measured by test scores, the Inquirer reported. Also, charter schools do not lure the top students away from traditional schools; rather, students transferring to charters tend to have below-average test scores, according to the Inquirer.
SOURCE:
Philadelphia Inquirer, "Mixed report card on charter schools,"
March 19, 2009
FURTHER READING:
Michigan Education Report, "Charter report favorable, state board wants more,"
Feb. 24, 2009
MICHIGAN EDUCATION DIGEST is a service of Michigan Education Report (https://www.educationreport.org), an online newspaper published by the Mackinac Center for Public Policy (https://www.mackinac.org), a private, nonprofit, nonpartisan research and educational institute.
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