The Michigan Senate is making an effort to pass a package of bills that would change retirement programs for all new teachers to a 401(k)-only plan instead of the current pension and 401(k) hybrid plans for new hires. The motivation behind this push is described by sponsors like House Republican Tom Leonard as an effort to keep the state solvent by transitioning to a more sustainable model. However, there is mounting evidence to the contrary, leading critics to disparage this last-ditch attempt to pass controversial legislation during the lame duck session. While the bill did pass committee with a 9-8 vote, a floor vote has been delayed due to opposition and new concerns about the cost of the plan.
Republican governor Rick Snyder has spoken out against the bills, as has Michigan Office of Retirement Services Director Kerrie Vanden Bosch, who testified before the Senate Appropriations Committee on Wednesday. Vanden Bosch expressed concerns that the bills would not address unfunded liabilities in the current retirement system, and would actually increase them. She also noted that the current hybrid plan is fully funded, and that making this switch would not free up additional dollars for classrooms, but would actually cost more. Democrats like Sen. Curtis Hertel voiced concerns that this reform effort further exacerbates the existing de-professionalization of Michigan teachers, and that it will make it even more difficult to attract and retain talent in the field of education. Critics have suggested that the Senate revisit this issue next year, allowing more time to discuss and vet the proposed bills, or to develop alternatives.
While promoted as an act of fiscal responsibility, it is difficult not to interpret these bills as potentially damaging to teachers and to the profession, as a whole.