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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
Michigan 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