A newly released video from TeacherPensions.org demonstrates just how significant recent passage of Michigan pension reform is to teachers' retirement futures. Legislation to reform Michigan's public school employee pension system passed both the House and Senate last week and is now headed to Governor Snyder to sign into law.
Michigan's teacher pension system was out of touch with the 21st century workforce. Only 20 percent of all new teachers received their full benefits, while 50 percent of new teachers received no benefits at all. Should a teacher change positions, their earned benefits would not carry with them.
But thanks to Michigan lawmakers, the future just got brighter for the state's teachers. Under the reform, future teachers will automatically be enrolled in a competitive, portable and modern defined contribution retirement plan with an option to participate in a hybrid model. This is important because it gives teachers control, freedom and flexibility over their finances and puts them on a path to secure retirement, regardless of tenure. Just as important, Michigan will be able to keep its retirement promises made to current school employees and retirees, neither of which are affected by the legislation.
To learn more about how many of the nation's teachers are negatively impacted by outdated retirement systems, and the significance of Michigan's pension reform, check out the video below.