Michigan Gov. Rick Snyder signed legislation into law on Tuesday that will vastly overhaul the state's pension program for public school teachers. According to an Associated Press report, the changes mean that the Michigan Public School Employees Retirement System will no longer provide a guaranteed pension for any public school employee that is newly hired past this point.
The bill, which was pushed through the state Legislature by both House and Senate Republicans, is the second piece of legislation passed this year that targets teacher pensions. An earlier measure that required teachers to pay a 3 percent contribution from their wages is currently at the center of a legal maelstrom, after the Michigan Court of Appeals ruled on Aug. 16 that the bill was unconstitutional. Snyder has promised to appeal the ruling.
Here is some of the key information regarding the teacher pension bill that Snyder signed on Tuesday.
* Detroit CBS News affiliate WWJ and other media outlets reported that the bill not only abolishes teacher pensions for new hires, but also significantly raises the health care contributions of current teachers as well.
* Teachers who are currently part of the public school system will now pay 20 percent of their healthcare costs, instead of the 10 percent that they had previously paid.
* Instead of a pension, new hires will be required to put up to 7 percent of their income into a 401(k) retirement plan. They also will not get healthcare once they retire, but instead will have a healthcare reimbursement account.
* The state will provide $2,000 to that healthcare reimbursement account, while also contributing 2 percent to the teachers' 401(k) retirement plan, according to a report by MLive.
* School district contributions to pensions will now be capped at 24 percent of the district's payroll.
* The required 3 percent contribution that the Michigan Court of Appeals has ruled unconstitutional is part of the new law as well.
* Snyder had pushed for reform regarding teacher pensions, saying that the state needed to overhaul the program in order to make sure that it was viable long-term. When asked about the bill as it was moving through the state Legislature, he had praised it, saying that "it's striking the right balance about taxpayer long-term liabilities and employees who have benefits," as quoted by Michigan Radio.
* Part of the bill that Snyder signed on Tuesday was struck down mere hours after it was signed into law. According to MLive, Judge Rosemarie Aquilna ruled that public school employees must be allowed more than the 52 days specified in the bill to decide whether they want to pay more to continue on with their same level of benefits, or to opt to pay less and receive less benefits.
Vanessa Evans is a musician and freelance writer based in Michigan, with a lifelong interest in politics and public issues.
