The Michigan Legislature will conduct an independent study on whether to close the $37.7 billion Michigan Public School Employee Retirement System's hybrid defined benefit plan to new hires and move them to a new defined contribution plan.
The study was called for in a retiree health-care bill that passed the Michigan Senate and House on Wednesday.
The study, to be completed by Nov. 15, will analyze the current Lansing-based retirement system and develop a plan “to ensure the long-term sustainability of the retirement system.”
A version of the bill had passed the Michigan Senate on May 17 containing a provision closing the existing hybrid DB plan and opening a new DC plan. Kurt Weiss, state budget office spokesman, said in a telephone interview that the original provision in the bill would have cost the state more than the current hybrid DB plan.
Both Gov. Rick Snyder and Budget Director John Nixon supported the bill but at the time requested at least six months to analyze the cost of moving to a defined contribution plan.
