Traverse City Record-Eagle

Michigan

June 14, 2012

Mich. House OKs changes for public teachers

Associated Press

LANSING — The Republican-led Michigan House approved legislation Thursday that would affect new teachers by ending state-provided health care coverage in retirement but not forcing them into a 401(k)-style retirement plan.

The bill, passed 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. The Senate is expected to take up the legislation later in the afternoon. Five Democrats abstained from voting, citing potential conflicts of interest because they are educators.

The measure calls for studying the financial impact on the state if the pension was ended, which was part of a proposal approved last month by the Senate and sought by many Republicans. State officials say ending the pension would require the state to set aside more money than expected from the school-aid fund.

Under the House bill, 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.

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