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3350 East Paris Ave. SE
Grand Rapids, MI 49512
p. 877.274.8796
f. 616.301.2149
Proposed Solutions: Changes to the Pension Plan
We will discuss proposed changes to the Pension Plan during your school’s meetings, but want to provide you with an overview of the ideas we’re considering. Please remember that these proposed changes apply only to future benefit accruals - no changes will be made to benefits you earn up to the effective date of any changes. Proposed changes include:
- Increasing contributions from participants and schools to maintain the current benefit accruals. People are living longer, so the Plan needs more contributions to pay the same level of benefits to participants over this extended period of time. While this option would maintain the current level of benefit payments, it may be a challenge for schools to make an increased contribution toward the pension benefit without affecting other aspects of compensation, such as salaries. Schools also have other options, including continuing current contribution levels - which would result in lower future benefit accruals for participants. In this case, participants would receive the same total benefit over time on average, but because that benefit is paid out over a longer period of time each monthly payment would be decreased.
- Increasing the age for unreduced benefits for those who retire early. Currently, participants age 62 or older receive an unreduced benefit. Participants who retire before age 62 receive a reduced benefit because they receive monthly payments beginning earlier than normally expected. A proposed change would be to increase the age for unreduced benefits to age 65. This change of increasing the age for unreduced benefits is similar to the Social Security Administration increasing its normal retirement age from age 65 to age 67 to account for the fact that people are living longer.
Again, we will discuss these proposed changes for future benefits in detail - and respond to your questions - during upcoming meetings.