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Michigan looks to close pension system to new teachers

Posted at 11:40 PM, Nov 29, 2016

LANSING, Mich. (AP) – 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.”