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Senate Moves School Retirement Reform Legislation

Dec 02, 2016

This week, the Senate Appropriations Committee reported three bills reforming pension plans for newly hired teachers.  The legislation would place school employees hired after July 1, 2017, into a 401k plan.  In the new plan, 4% of employee’s salary would go into the 401k, plus there would be an employer match of up to 3% of their salary.  The proposal has a large upfront cost to the state estimated to be $591 million in the first year alone.  Currently, under reforms passed by the legislature in 2012, public school employees have the choice of a 401k plan or a hybrid plan, including a 401k and pension.  The three bills were reported on a party-line vote, with the Republican Senators supporting the package.

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