LANSING, Mich. (AP) — A bill that supporters say would save money on retiree benefit costs related to Michigan state government employees gained final legislative approval Tuesday and is headed to Republican Gov. Rick Snyder.
The Republican-led Senate approved the measure Tuesday by a 23-15, mostly party line vote. The bill already has been approved by the House.
The bill would eliminate the 3 percent employee contribution that state workers have been making since last year to help cover retiree health care costs. Those contributions, which had been challenged in court cases, would be refunded to workers next year.
The bill would require employees covered by state pension plans to decide whether to remain in the pension plan or convert to a 401(k) system. Workers who choose to remain in the pension plan would have to contribute 4 percent of their compensation, a provision that some state employee unions oppose.
Ray Holman, legislative liaison for United Auto Workers Local 6000, said the constitutionality of that provision will be reviewed before opponents decide whether to take legal action. The union representing roughly 17,000 state employees opposes the legislation, but Holman said the bill headed to Snyder is improved from the “horrible” original version introduced earlier this year.
Retiree health insurance coverage would be eliminated for new state employees hired after Jan. 1, 2012. That benefit would be replaced through a 401(k)-like system for health coverage. Similar options would be available to current state workers if they were hired in 1997 through this year.
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