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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