Agency: Ending Pensions For New Teachers Costs Billions

From the Associated Press — Legislative economists estimate that it would cost $410 million in the first year to close Michigan’s pension system to newly hired teachers and instead provide them a 401(k) only. The nonpartisan House Fiscal Agency released its analysis Wednesday, a day
after Republican-sponsored legislation was introduced. The bill would affect new school employees hired after September 30. The analysis
estimates transition costs would total $2.3 billion in the first full five years, or about $465 million annually. Majority Republican lawmakers say the pension plan should be closed to new hires so the state stops accumulating debt. Governor Rick Snyder and Democrats say a 7-year-old hybrid pension/401(k) plan is working and upfront costs of a switch are too high.