Have you ever heard the term “pension spiking”?

Well if not, “pension spiking” is the scheme when employees in concert with their management, inflate their salary in the years immediately preceding retirement in order to receive larger pensions than they otherwise would be entitled to receive. This inflates the pension payments to the retirees and harms the fiscal soundness of the pension fund. In the public “corporate” education business to allow this scheme to occur the school districts must be in on the scheme with the employee and allow them to call this “release time”.

Back in 2015 Republican, you didn’t think I would say a Democrat did you, Senator Knollenberg's wanted to put a stop to this unethical scheme.  He sponsored Senate Bills 279 and 280.

Senate Bill 279 would:

prohibit public school districts from adopting arrangements in which a school employee goes to work full time for a teachers union but remains a school employee for purposes of collecting a government pension. Recent news reports have exposed how the recent presidents of the state’s largest teacher union were paid by the union but remained school employees "on leave" for many years, thereby "spiking" their government pension payouts to six-figure amounts.

Senate Bill 280 would:

prohibit the state and local governments including public schools from carrying union officials on their payroll for doing union work, on either a full time or part time basis. Under these so-called “release time” arrangements many public school districts pay a local union official a full time teacher's salary and benefits even though the individual does not teach or perform any other educational functions

The bills both passed in the Senate back in November of 2015 and were sent to the House.  In the Republican-controlled House, they just sat there and died, the Republicans did not even call for a vote on them.

Why is and did the state of Michigan, specifically the House Republicans in 2016 allow these school districts, teachers and Unions to scam this kind of cash from the Michigan taxpayers?  You would have to ask those in office at the time.  When I say “this kind of cash” we are talking about well over a $100,000 dollars a year.

For example:

  • Former president of the Michigan Education Association (MEA) was receiving a teacher’s pension from the state of Michigan for $103,227 per year.  Steve Cook, had not worked in the classroom for 15 years and when he did, he was not even a teacher he was a school paraprofessional.
  • Former MEA President Iris Salters is collecting an annual Michigan public school pension of $190,608.
  • Former MEA President Lu Battaglieri is getting $117,180

Now the Mackinac Center for Public Policy is informing us of yet another sweetheart deal. This time it is was for a former junior high school teacher from Pontiac Michigan. Julius Maddox was a teacher way back in the early 1980s and then served as president of the state’s largest teachers union, the Michigan Education Association, from 1983 to 1991.  He now collects an annual Michigan school teachers’ pension of $144,276 a year.  That is $12,023 dollars a month or if you like $2,774.54 dollars a week for what?  Is this what most teachers make in their pensions, I can assure you they do not.

How did Julius and all the other former MEA millionaire Presidents get away with this?  Due to the school districts they worked in allowing them to and good old “release time”. During their time on the union payroll, Maddox and the others were allowed to claim that they were on leave from their public-school employer. They were then able to use their six-figure MEA salary to generate a higher school pension payout after they retired.

That’s how.

According to the Michigan Capitol Confidential article:

Nothing in state law prohibits public school employees who struck a deal with their local school district in 1996 or earlier from applying the amount they collect in an MEA union salary toward getting a state pension today — a payment guaranteed by the state constitution. After 1996, any deals union officials have with local school districts still let them claim time served working for the union as applying to their public school pension. But they can no longer apply their union salary to the pension calculation and must use their salary history as a public school employee instead.

Can someone explain why a person who has left the public school system should be able to claim their time served working in the corporate private industry can apply that time to their public-school pension calculation?

There were two more bills to stop this pension spiking scam, one was House Bill 5368 (2017) and the other was House Bill 4086 (2019).  Guess what, they went nowhere and were left to die on the Bill vine in, you guessed it, a Republican-controlled House.

We need to stop this raping of the Michigan taxpayer.  If the elected state Representatives and Senators will not, the people of Michigan must step up and replace them with people who will.

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