Newly-Hired Michigan Teachers to Pay More Into Pension System

October 4, 2007 ( - Teachers in Michigan hired after July 2008 will have to pay 6% into the state's pension system, up from the 4% that teachers are now required to pay, according to the Associated Press.

This means that the state will be paying less into the retirement system for newer employees, with an estimated savings of about $29 million by the 2013-2014 fiscal year, according to figures from the Office of Retirement Services.

The legislation faced opposition from the Michigan Education Association, which argued that such a measure would discourage teachers’ from staying in the profession.

The changes for teachers’ retirement payments were tacked onto a budget deal that passed in the Legislature during a weekend session.

Health Care Changes

The Michigan legislature also passed bills mandating that schoolemployees won’t qualify for retirement health care premiums until they’ve worked 10 years, when 30% of their premiums would be covered. Teachers will then get 4% more of their premiums covered for every year past that.

Anyone who retires at age 60 with 30 years of service will qualify for 90% coverage of their monthly health care premium, the same coverage that current retirees get. The legislation will also bar new teachers from having their purchased service credits count as years that increase their health insurance premium coverage, saving the state $45 million, according to the news report.