New bill proposes eliminating teachers' pensions - WNEM TV 5

New bill proposes eliminating teachers' pensions

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(Source: WNEM) (Source: WNEM)
BAY COUNTY, MI (WNEM) -

Public school teachers in Michigan have long enjoyed having a pension to support them when they retire.

For new teachers joining the workforce, the could soon come to an end.

The State House and Senate both introduced identical bills to replace the teacher pension system with a 401K style plan. The move is intended to eliminate billions in debt.

Brent Van Horn, special education teacher at Bay Arenac ISD, said people often ask him why he wanted to become a teacher. He has only been a teacher for about a month after graduating from Saginaw Valley State University in December.

"When it came time for me to make a decision in a career, I wanted to give back," he said.

Van Horn said teaching runs in the family. He is following his mother and father's footsteps.

He said he is no stranger to the difficulties that may be associated with being a teacher, including saving for the future.

Recent legislation passed in the State House and Senate poses to close the state's teacher pension system to new hires.

Currently the teachers have a choice. They can have a hybrid option which includes both a pension and a 401K or they can have the 401K by itself. The proposed system would take away that choice.

The proposed system would include an employer putting 4 percent of a teacher's wages into a 401K plan. The teacher would have the option to put an additional 3 percent into the plan, which the state would then match - making for an overall possible total of a 10 percent contribution.

Van Horn said that could drive teachers away, but he also sees both sides.

"There is a shortage in teachers and I don't think this legislation, just my opinion, will meet the need of trying to decrease that shortage. However, I do see that the other argument is that there is a high turnover in teachers and that teachers that leave this field can take their 401K and go to other professions," Van Horn said.

The new system would only affect teachers hired after Sept. 30 of this year.

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