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Teacher pension overhaul headed to Governor Snyder

Flickr User A Healthier Michigan
Governor Rick Snyder

New teachers will get different retirement options than current school employees under a bill sent to Governor Rick Snyder Tuesday.

This months-long argument threatened to derail budget negotiations between GOP leaders and Governor Snyder, who is anxious to get the spending plan wrapped up this week.

Republicans like state Representative Tom Albert say the current pension system is unaffordable and burns up money that could be used in classrooms and to boost teacher pay.          

“So if we start reigning in the pension costs, hopefully in the future we can start paying more for a starting salary.”

“One of the reasons, young kids aren’t getting drawn into education right now is starting salaries are too low, and if you look, wages are being constrained, pension costs are taking up a big chunk of the total compensation.”

But not all Republicans were on board. State Representative Marty Howrylak says he voted “no” because this plan doesn’t offer a secure retirement to new teachers

“We need to also make sure that the education community is being offered a viable and sustainable retirement option. So we don’t want the pendulum to swing so far to the other side that we disincentivize folks from going into the teaching profession.”

The new system would provide traditional 401-K plans and a hybrid 401-K and pension plan that would require higher contributions from new teachers.

The overhaul is opposed by Democrats, teachers unions, and school administrators – who say this punishes new employees without fixing the problems.