GENESEE COUNTY -- Senate Bill 1040 is awaiting Governor Rick Snyder’s signature. The measure revises Michigan’s public school employees’ retirement system. School officials say it helps to fill a multi-billion dollar gap that schools can’t fill to pay for pensions.
Some former teachers weighed in. "The idea that a contract is a contract. We were promised these things when we retired,” says retired teacher, William Catton.
William and Sue Catton are former teachers but since hanging up their teaching hats, the benefits of retiring have not been what they'd expected.
"We thought this is what we're going to have to retire on and to suddenly be told no we're going to put in a state tax, double health care. We don't know what to expect," says retired elementary teacher, Susan Catton.
"We assumed we'd be paying a certain amount for our insurance now we know its going to double for us. That’s an additional $2,000 a year," says William.
The employee pension reform bill freezes the percentage that schools pay into an employees' pension. It also requires employees, former and present, to pay more for health care.
Over a two-year period, schools in Genesee County would save an estimated $40 million.
"We've got to stabilize the system otherwise it crashes and nobody has any pension or healthcare," says Jerry Johnson, executive director of the Genesee Intermediate School District.
Under the proposal, school districts will cap the contribution for employee pensions at 24.46 percent. Without the law in effect, the rate would climb to 27 percent this year and 31 percent the next.
"Local districts can't afford that so this is good for districts saves millions automatically," says Johnson.
But for teachers, the extra pull on their pocketbooks is not going unnoticed.
"The state is hurting but seems like the state is making teachers pay for the economic slump that we're in," says Catton.
Employees have until October 26 to decide on a pension plan. The proposed law would take effect in December.
