LANSING–Governor Rick Snyder signed a bill today modernizing the Michigan Public School Employees Retirement System.
Senate Bill 401 sponsored by Sen. Phil Pavlov would increase the state’s share to defined contribution plans, while reducing the unfunded liabilities of the overall system. The bill creates a new 401(k)-style defined contribution plan with an employer contribution of 4 percent of the employee’s salary and an voluntary matching contribution of 3 percent from the state School Aid Fund.
Snyder says modernizing the school employee retirement system benefits will be there for retired school employees in the long term, while protecting taxpayers from escalating liabilities. The new law will also create a new optional revised hybrid plan including a 50/50 cost share between the employee and employer.