Pension Deal Steers More Teachers To 401(k) Plan
Newly hired school employees would automatically be enrolled in a 401(k)-only retirement plan unless they opt out within 75 days and instead choose a blended pension benefit that would cost more of their paycheck under a deal struck between Gov. Rick Snyder and Republican legislative leaders.
The change agreed to Tuesday would apply to teachers and other school workers hired on Feb. 1 or later and cost the state much less than an earlier version of legislation introduced last month. That's according to a summary of the agreement circulated to GOP senators at a caucus meeting and obtained by The Associated Press.
New hires now qualify for a pension and a small 401(k).
Under bills that could begin advancing Wednesday, they would default into a 401(k)-only plan like what state employees receive. They could still pick a pension, but it would cost them more than what teachers now pay.