The package will increase the pension multiplier, currently at 1.5 percent, to 1.6 percent for teachers already eligible to retire if they do so between July 1 and Sept. 1. It also will allow teachers to retire with a 1.55 percent multiplier if their age and years of service total 80.

The multiplier determines the monthly pension received based on time employed and salary.

Approximately 55,000 teachers in Michigan qualify for retirement under this new plan, said Bethany Wicksall, an analyst with the nonpartisan House Fiscal Agency.

It is assumed 50 percent of those eligible will take the retirement deal, leaving vacant teaching positions. About 90 percent of employees likely will be replaced, creating about 25,000 jobs in the state, Wicksall said.

These positions likely will be filled by recent graduates, which is good news for MSU students who hope to teach in Michigan, said Sharif Shakrani, the co-director of the Education Policy Center at MSU.

“It would have a positive effect on our recent graduates,” Shakrani said. “The way it will work is the bill will encourage the older teachers to retire and the schools would be hiring more recent teachers.”

In addition to creating jobs for graduates, the bills will create savings for school districts by requiring employees to pay 3 percent of their salary into a retirement health care plan. This will save local school districts an estimated $670 million in the first year and $3.15 billion the next 10 years, Wicksall said. These savings will allow schools more money to keep quality teachers employed, said state Sen. Nancy Cassis, R-Novi, who supported the plan.

“Michigan continues in the worst recession since the Great Depression and simply put, we no longer can afford to keep spending in all areas of the budget,” Cassis said. “But we were able to reduce any cuts to schools by providing for long-term reforms that will provide for direct savings to the school. Those savings will be passed on to classrooms and will keep teachers on the job.”

The bills were met with opposition from organizations such as the Michigan Educational Association, or MEA, because of its requirement for current teachers to pay into retirement health care.

The legislation forces current employees to pay out of their salary to support current retirees without any guarantee they will receive the same support upon retirement, said Kerry Birmingham, the MEA creative communications specialist.

“It’s essentially a 3 percent tax on public school employees … subsidizing the people who have retired before them,” Birmingham said. “(The plan is) not going to do anything except penalize people for staying committed to their careers.”

The plan was also opposed by many Democrats, including state Rep. Mark Meadows, D-East Lansing.

“I felt that there was a very strong investment in local school districts mandated by this legislation, and that investment was a forced contribution by public school employees – the 3 percent contribution,” Meadows said. “I was willing to actually support that as long as the requirement that the contribution be extended to charter schools as well.”

Cassis said the 3 percent contribution to retirees’ health care was the only way to offer the schools more money without increasing taxes.

“Quite frankly, if that was not done, we would of had to cut more than $250 per student and that would have caused a crisis in many of our schools,” Cassis said.

The plan also creates a hybrid pension and 401K plan for employees hired after July 1. The bills now go to Gov. Jennifer Granholm, who is expected to sign them into law, said Megan Brown, Granholm’s spokeswoman.