Agency: Ending pensions for new teachers costs billions

Legislative economists estimate that it would cost $410 million in the first year to close Michigan's pension system to newly hired teachers and instead provide them a 401(k) only.
 
     The nonpartisan House Fiscal Agency released its analysis Wednesday, a day after Republican-sponsored legislation was introduced.
 
     The bill would affect new school employees hired after Sept. 30. The analysis estimates transition costs would total $2.3 billion in the first full five years, or about $465 million annually.
 
     Majority Republican lawmakers say the pension plan should be closed to new hires so the state stops accumulating debt. Gov. Rick Snyder and Democrats say a 7-year-old hybrid pension/401(k) plan is working and upfront costs of a switch are too high.