LANSING, Mich. (AP) — The Republican-led Michigan House has narrowly voted to coax more newly hired teachers into a 401(k)-style retirement plan by making them assume more of the risk if they pick a pension option.
Identical legislation cleared the GOP-controlled Senate Thursday. The votes set the stage for final voting next week after Gov. Rick Snyder and top Republicans reached a deal in recent days.
One Republican says pensions are a `vestige of a bygone era’ and the bill would keep Michigan from accumulating debt. Democrats say the legislation would make it harder to recruit teachers and would be more expensive for the state.
The change would affect school employees after on or after next Feb. 1. Also, those who have already chosen a 401(k)-only plan would see an enhanced employer contribution.