On Thursday, Governor Rick Snyder signed into a law a bill reforming the Michigan Public School Employees Retirement System. Proponents of the change claim that pension programs have become a financial burden for public school systems and the MSPERS “hybrid” plan will no longer be available to new enrollees as of February 1, 2018. A 401(k)-style contribution plan will take its place with an employer contribution of 4 percent of the employee’s salary. The state School Aid Fund will then provide an additional voluntary matching contribution of 3 percent.
The MPSERS reform has been a hot topic in the legislature for years and both chambers have acknowledged a need for close attention to detail when drafting the language of this bill. Speaker Tom Leonard (R-Dewitt) issued a statement praising the House and Senate Republicans for their tireless work on the reform.
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