Posted on Mon, May 21, 2012 : 1 p.m.
Pensions for new teachers would remain under Michigan House reform bill
By Danielle Arndt
The Michigan House of Representatives Appropriations Committee passed a preliminary version of a school employee pension reform bill Monday.
The House Appropriations Committee hears testimony Monday from an opponent of a bill that would change pensions and health care for school employees and retirees.
David Eggert | MLive.com
In the Senate version, pensions would be denied to new teachers and other school workers hired in 2013 and beyond in favor of a 401 (k)-style retirement plan.
Read the complete MLive.com story here.
Staff reporter Danielle Arndt covers K-12 education for AnnArbor.com. Follow her on Twitter @DanielleArndt or email her at daniellearndt@annarbor.com.
Comments
local
Tue, May 22, 2012 : 12:27 a.m.
Why is this just a teacher issue? I don't see police, firefighters, or even public legislators on this list of pension reform. You can say what you want, but it seems that the focus has been on teachers since Snyder has taken over. I think this election cycle in November is going to be interesting.
u812
Tue, May 22, 2012 : 2:36 a.m.
it's a ploy to get more charters schools and line the pockets of the rich and not the middle class.
Mike
Mon, May 21, 2012 : 9:37 p.m.
Who's paying for these pensions? Politicians? Will the US government print more money? Or will our grandchildren and great-grandchildren pay?
Randolph
Tue, May 22, 2012 : 3:07 p.m.
Education is and always has been a shared expense. People without children have never complained too loudly because after a moments thought, they realize that a sound education for all children benefits all citizens. The pensions are actually already a big part of the market and their demise could affect it significantly. Those who would do this are short sighted disaster capitalists, not at all mainstream. There is plenty of money available to sustain the system but it is going into the wrong hands: corporations who have no interest in committing or participating in a venture for the "greater good". Education is only the first brick to be taken out of the wall, I'm afraid.
Mike
Tue, May 22, 2012 : 12:31 p.m.
@Steve - The employers are the taxpayers! The "public servant" pays a very small percentage. The rest of us are facing cuts in socuial security benefits and raising of the retirement age so we can continue to work and support the pensions of our "public servants".
Steve Norton, MIPFS
Tue, May 22, 2012 : 3:37 a.m.
Who is paying? Current employees and school districts - that is, our kids. Teachers and other school employees already (mostly) make substantial contributions, and the rest - up to whatever level is necessary to fund the pension plan - is paid by school districts out of their operating dollars. It's at 24% of payroll right now.
Veracity
Tue, May 22, 2012 : 1:54 a.m.
Usually the employee and the employer pay into the pension plan with payroll deductions as is the case with my federal pension. Whether this funding mechanism applies to the teachers' pension program I do not know. The money in the pension programs are supposed to be conservatively invested to enhance the value of the pension fund. Where pension funds are insufficient to meet expenditures for retirees then money must be added from the municipalities general fund (as may happen in Ann Arbor in the future).
DonBee
Mon, May 21, 2012 : 9:28 p.m.
Right now Lansing is grinding sausage. If you have an opinion it is a great time to email or call your representatives in Lansing and weigh in.
Steve Norton, MIPFS
Mon, May 21, 2012 : 8:25 p.m.
Actually, while House Appropriations did adopt their own "substitute" (major amendment) to the bill, they have not yet reported it out of committee. They took testimony today. it sounds like it will be reported out to the full House this week, though. Ms. Peck - the confusion is between the Senate-passed (S-2) and current House (H-1) versions of the bill. The Senate version closed the pension system to new hires and put all new employees in a defined contribution, 401k-style, program. The House version reverses that, and puts back the provision that new hires would be in a hybrid defined benefit/defined contribution system (as new hires have been since 2010). Where this will end up is just about anyone's guess.
Linda Peck
Tue, May 22, 2012 : 12:04 a.m.
Thank you, Mr. Norton. I "understand" it better now.
Linda Peck
Mon, May 21, 2012 : 8 p.m.
The headline to this article is misleading, as pensions for new hires are to be discontinued in 2013 in favor of 401k plans.
u812
Mon, May 21, 2012 : 6:30 p.m.
how about matching numbers comparable to the PRIVATE Sector!
Steve Norton, MIPFS
Mon, May 21, 2012 : 8:28 p.m.
u812 - what do you suggest? The Senate version of the bill had new employees getting 4% employer contributions plus 1:1 matching up to another 3% (so 7% employer plus 3% employee, maximum). UM staff benefits is 2:1 matching up to 10/5 percent (10% employer, 5% employee). These are the people who teach our children, after all. How do you want to treat them?
hail2thevict0r
Mon, May 21, 2012 : 7:27 p.m.
Yes, because paying the educators of our children even less is exactly what will fix all of our problems....We should be attracting the brightest and the best to teach our children - not the other way around.