Senate OKs school pension tweak

Senate OKs school pension tweak | The Detroit News | detroitnews.com
Lansing— The Michigan Senate voted Thursday to alter the fringe benefits of public school employment and eliminate pensions for new workers.
On a narrow 20-18 vote, the Senate approved legislation establishing a 401(k)-style defined contribution retirement plan for all employees hired after Jan. 1, 2013.
Senate Bill 1040 also would eliminate guaranteed lifetime health insurance coverage for newly hired public school employees.
Instead, new workers would get an additional 2 percent of salary dedicated toward their 401(k) retirement fund.
The controversial legislation now heads to the House. Speaker Jase Bolger said Thursday he hopes to deliver the legislation to Gov. Rick Snyder's desk with a new state operating budget by June 1.
The bill passed Thursday over the objection of some lawmakers, who said the Legislature should not be changing the pension and retirement benefits for thousands of employees who have worked under assumptions their costs were fixed.

In 2010, the Michigan Public School Employees Retirement System had a $45 billion unfunded liability.
State budget officials estimate the liability may now be more than $50 billion, said state Sen. Roger Kahn, R-Saginaw.