LANSING—The Michigan Senate passed a teacher retirement reform early Friday that will save the state’s schools billions of dollars without adding a new health care mandate, and will help save educators’ jobs, said Sen. Mike Nofs.
“I am glad the Legislature and the governor finally came together to approve these significant teacher retirement reforms,” said Nofs, R-Battle Creek. “This was a long, hard process but we passed reforms that protect thousands of teaching jobs while working to fill the hole in next year’s School Aid budget, which goes directly to helping our students in the classroom. Our schools and the state are better for it.”
Senate Bill 1227 is projected to save $650 million next year and $3.1 billion over 10 years. The measure includes a 1.6 multiplier for school employees aged 55 and over with at least 30 years of service, instead of 1.5, and a 1.55 multiplier for those whose combined age and years of service is at or over 80. Charter schools are not forced to comply.
New employees will enter a hybrid retirement plan, with an annual contribution of $510, plus 6.4 percent of their salary over $15,000. An additional 2 percent or more would be put into an employer-matched 401(k) plan. To receive full benefits new hires would not be able to retire until 60 years of age.
SB 1227 awaits the governor’s signature.