Michigan Senate panel votes to close school pensions to new members
LANSING — The Republican-controlled Senate Appropriations Committee voted 9-8 Wednesday to close the school retirement system to new members, despite expert testimony from the administration of Gov. Rick Snyder and others that the move will cost billions.
The bills moved to the full Senate, where they were expected to be taken up as early as Wednesday night, but the close committee vote slowed the fast-track legislation, making a Thursday Senate vote most likely.
Debate raged over the Michigan Public School Employees Retirement System at the Capitol, as a new Senate Fiscal Agency report pegged the cost of the legislation at $1.6 billion to $3.8 billion over five years.
The main reasons for the increased costs are that employer contributions to the 401(k)-style plan will be close to three percentage points higher than they are to the existing "hybrid" school retirement system — which mixes a smaller defined-benefit pension with a defined contribution plan — and that with no new money coming into MPSERS, more conservative investment strategies will be called for and expected returns will be significantly lower.
Read more: http://www.lansingstatejournal.com/story/news/local/michigan/2016/11/30/senate-tackle-school-employee-pensions-today/94656622/