3:05 p.m.
Newly hired school employees would automatically be enrolled in a 401(k)-only retirement plan unless they opt out within 75 days and instead choose a blended pension benefit that would cost more of their paycheck under a deal struck between Gov. Rick Snyder and Republican legislative leaders.
The change agreed to Tuesday would apply to teachers and other school workers hired on Feb. 1 or later and cost the state much less than an earlier version of legislation introduced last month. That's according to a summary of the agreement circulated to GOP senators at a caucus meeting and obtained by The Associated Press.
New hires now qualify for a pension and a small 401(k).
Under bills that could begin advancing Wednesday, they would default into a 401(k)-only plan like what state employees receive. They could still pick a pension, but it would cost them more than what teachers now pay.
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1:35 p.m.
Gov. Rick Snyder and Republican legislative leaders have reached a budget deal that includes changing Michigan's teacher retirement system to coax new employees into a 401(k)-only plan.
They made the announcement Tuesday afternoon after a meeting at the Capitol.
Senate Majority Leader Arlan Meekhof and House Speaker Tom Leonard plan to brief their Republican caucuses on the agreement. Details are expected to be released later in the day.
New school workers currently qualify for a blended pension-401(k) plan. Under the plan being finalized, new hires would default into a 401(k) unless they choose a different hybrid plan that could ask them to pay more.
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11:10 a.m.
Gov. Rick Snyder and Republican legislative leaders are finalizing more pieces of a tentative deal to restructure Michigan's teacher retirement system to coax new employees into a 401(k)-only plan.
They reported progress after meeting Tuesday. The talks may resume in the afternoon and are tied to completing the next state budget.
A key issue is how a pension option could be closed to newly hired teachers in the future.
Senate Majority Leader Arlan Meekhof says "safeguards" are needed so closure could occur if the system becomes underfunded and employees could pay more to help shore it up.
New school workers currently qualify for a blended pension-401(k) plan. Under the plan being finalized, new hires would default into a 401(k) unless they pay more toward their pension than current employees do.
