New Public School Employee Retirement Plan To Take Effect Next Year
Governor Rick Snyder has signed into law controversial changes to the state’s public school employee retirement system.
Starting in February of 2018, new teachers will get a new choice about their retirement savings. They’ll automatically be put into a straight 401-K plan. But they can enroll in a hybrid plan if they want. That hybrid plan includes a pension – but it’s more expensive for the teacher.
Republican Senator Phil Pavlov is a bill sponsor. He says an attractive, portable plan – like the 401-K – is the way of the future.
“It’s what about 95 percent of the rest of America had," said Pavlov. "The teaching profession was, you know the last one to come along on it.”
Critics say this new system doesn’t actually do anything lawmakers want it to do, like fix unfunded liabilities.