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Tue September 4, 2012
Retirement changes signed into law today for Michigan's teachers
Governor Rick Snyder will sign legislation into law Tuesday that will make some changes to how teachers and other school employees save for their retirement.
School employees will have to pay more for their benefits, and those hired after today will no longer get retirement health coverage.
Instead, they will get savings accounts to help them buy insurance once they are done working.
Governor Snyder said he understands that many school employees are upset.
“We had to make some reforms to make it fiscally viable and financially sound f or their future, too, in terms of their retirement benefits," said Snyder. "So, it’s a case of us all working together, and sometimes change is tough on people and I appreciate that. We’re just trying to make it something that lasts for the long term for the benefit of all."
Snyder said the new approach will begin to retire a long-term pension liability estimated in the billions of dollars.
He said it will also shore up the state’s credit rating, and ensure taxpayers won’t be saddled with the costs of a bailout years down the road.
Teachers unions say the plan breaks promises made to school employees, and went to court on Friday with a legal challenge.
School pension reform