State panel votes to close pensions to new teachers

Posted at 4:59 PM, Nov 30, 2016
and last updated 2016-11-30 16:59:35-05

LANSING, Mich. (AP) — A legislative committee has voted to close the pension system to newly hired school employees in Michigan and instead provide them solely a 401(k) in retirement.

The Republican-controlled Senate could pass the legislation later Wednesday and send it to the House.

The bills would apply to school workers hired on or after July 1, 2017.

Republicans say the Michigan Public School Employees Retirement System is “unsustainable” and 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.

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