Latest News and Comment from Education

Monday, May 21, 2012

Cost concerns arise after Michigan Senate's vote to end teacher pensions | MLive.com

Cost concerns arise after Michigan Senate's vote to end teacher pensions | MLive.com:

'mlive.com

Cost concerns arise after Michigan Senate's vote to end teacher pensions

Published: Friday, May 18, 2012, 6:30 AM     Updated: Friday, May 18, 2012, 4:37 PM
David Eggert | deggert1@mlive.com 
session.JPGMichigan senators gather Thursday before voting on pension reforms for public school employees.
Update: Unions: Moving school workers to 401(k)s would be cost prohibitive
LANSING, MI – Teachers hired in 2013 and beyond would no longer qualify for a pension in retirement and instead draw from a 401(k)-style plan under sweeping changes narrowly approved Thursday by the Republican-led Michigan Senate.
The switch in retirement plans, similar to one made for new state employees in 1997, is among a number of reforms aimed at shoring up the 444,000-member Public School Employees Retirement System.
The retirement system is facing $45 billion in unfunded liabilities because of rising health care costs, fewer active members, more retirees and big declines in the stock market in some years.
Senate Bill 1040, approved 20-18 and sent to the GOP-controlled House for its consideration next week, would require school districts to