LANSING — State Sen. Rick Jones, R-Grand Ledge, is working on a measure to change the school retirement system to a 401k style.
Jones previously sponsored House Bill 6131 in May 2010 while serving in the House of Representatives. The new proposal is a re-introduction of HB 6131.
“It is time to change the system,” Jones said. “The current retirement plan is not sustainable.”
According to two superintendents in Jones’ district, for every dollar spent on a teacher this fiscal year, 20.66 cents goes into the retirement plan and that percentage is projected to go up to 27.37 in fiscal year 2012. The budget proposal currently being debated cuts schools $300 per pupil foundation grant. The federal money from last year is gone, cutting another $170, bringing the total to a $470 reduction.
“I have not supported the cuts or the transfer of school aid funding to colleges or universities,” Jones said. “But, I believe now is the time to change retirement plans for future teachers.”
Current school employees in the system would keep their plan and are guaranteed payment of their retirement by the Michigan Constitution.
State employees (including legislators) have already been changed over to 401k type programs.