Michigan looks to close pension system to new teachers - WNEM TV 5

Michigan looks to close pension system to new teachers

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The Michigan Senate is poised to vote to close the pension system to newly hired school employees and instead provide them solely a 401(k) in retirement.

The Republican-controlled chamber plans to approve the plan Wednesday once it clears a committee.

Republican Senate Majority Leader Arlan Meekhof says the Michigan Public School Employees Retirement System is "unsustainable" and at some point won't be able to finance pension benefits because of a $26.7 billion unfunded liability.

Since mid-2010, new hires have qualified for a "hybrid" plan, with a blending of a traditional pension and a 401(k). Older teachers receive a pension.

The bill is unlikely to affect current school workers or retirees.

Democrats say they're unified against the measure. Senate Minority Leader Jim Ananich says people "want more economic security, not less."

"Now the Republicans are saying that's not a retirement plan that's worth protecting. Their plan seems to be you work until you're dead," Ananich said.

He said Senate Bill 102, which would eliminate pensions for new school staff, is a risk to the livelihoods of retirees from teachers and bus drivers to administrators and custodians.

"You know what, we're gonna make you work a lot of hours. You're going to pay more for your healthcare and then at the end when you're done doing one of the most important jobs in society, hopefully you'll have enough to make ends meet," Ananich said.

If put into law, the bill would end the state's pension program for school staff across the state, making 401K plans the standard form of income for school employees when they retire.

It's a move even some Republicans aren't supporting, including Saginaw County's Ken Horn.

"This is really making administrators and educators, I mean janitors and bus drivers, it's making them all really nervous when we talk about changing the system again just four years after we fixed it once before," Horn said.

He said he would like to see the legislature wait until next session to pass the bill until questions can be answered.

"It's my intent to vote no on this bill and I know that we really need to talk about how this is going to affect our budget - not only in the year 2017, 18 and beyond, but in 2030, 40 and 50 when the employees coming into the system today begin to retire," Horn said.

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