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Fri June 15, 2012
House approves hybrid teacher retirement plan
LANSING, MI (AP)-- The Michigan House has approved legislation ending state-provided health care coverage in retirement for new teachers but not a provision forcing them into a 401(K)-style retirement plan.
The bill passed Thursday by a 57-47 vote would keep new teachers in a part defined-benefit, part defined-contribution pension system and offer the option of a 401(K)-style plan.
Lawmakers will study the financial impact of broader retirement plan changes on the state. Officials say ending the pension would require the state to set aside more money than expected from the school-aid fund.
New public school hires would get a match of up to 2 percent plus a lump sum upon retirement to pay for health insurance. Retired employees covered by state-provided insurance would pay at least 20 percent of their premiums.