MI House Approves Changes to State Retirement Plans
November 4, 2011 (PLANSPONSOR.com) – The Michigan State House approved changes to the state employee retirement plans, including an end to guaranteed retiree health care for new employees, effective January 1.
According to the Detroit Free Press, employees hired before 1997 and covered by the state’s defined benefit pension plans will be allowed to remain in the current pension system, but will be required to contribute 4% (up from 0%) of their wages to retirement. The bill would also eliminate the 3% contribution that state workers have been making toward retiree health care costs.
If passed, the bill also calls for retiree health insurance coverage to be eliminated for workers hired for the state after January 1, 2012. These workers would be put in a 401(k)-type system in which the state would contribute a matching payment of up to 2%.