9 Aug

Rep Albert Signing of school retirement reforms important day for Michigan

first_img Categories: Albert News,News State Rep. Thomas Albert of Lowell today welcomed a new law that will benefit public school finances by reforming Michigan’s school employee retirement system.“This is an important day for Michigan and a huge step forward for public education finances in our state. We’re improving prospects for the future while keeping our commitments to retirees and current educators,” said Albert, who sponsored House legislation identical to the Senate bill signed into law today by Gov. Rick Snyder.Albert attended today’s bill signing.The bill reforms the Michigan Public School Employees Retirement System without changing benefits for retirees and current educators, except in one category where the benefits improve. Current school employees who already have opted for a 401(k) plan will get a new, more lucrative defined contribution plan along with new hires. Retirement money will follow employees throughout their careers, even if they change jobs or professions, through a plan that mirrors one available to state employees since 1997.The reforms will help ease debt growth in Michigan’s public school employee pension and retiree health care system, which has an unfunded liability approaching $40 billion – including $29 billion on the pension side alone. The debt costs the state and local schools nearly $2,000 per student annually, a cost that has been rising each year. About 36 percent of school payroll now goes to pay for the retirement system, up from 11 percent in 1997.The legislation also gives employees an annuity option through the 401(k), if they desire a guaranteed portion of retirement income.New school employees will have the option of selecting a revised hybrid plan – with elements of a 401(k) and pension — that is more stable, predictable and less risky for the pension fund than the current version.The state also will make an additional $200 million payment to reduce debt in the system.### 13Jul Rep. Albert: Signing of school retirement reforms ‘important day for Michigan’last_img

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