LESLIE, Mich. — White Pine Academy has saved money and jobs by opting out of the state retirement plan for school employees, the principal told The Jackson Citizen Patriot.

Principal Jared Vickers said that the 3 percent match that the academy contributed to its employees’ 401(k) retirement plans this year represent a $700,000 savings over what it would have to pay if its staff were in the Michigan Public School Employees Retirement System, The Citizen Patriot reported. That has allowed to school to keep 18 full-time employees, the report said.

Next year the academy will not offer any matching contributions, due to budget reductions, though in the past the match has been as high as about 7 percent, Vickers told The Citizen Patriot.

The academy’s savings are similar to the findings in a report issued this week by the Fordham Institute, which said that about 72 percent of Michigan public charter schools do not participate in MPSERS, mainly due to the plan’s high cost.

“With the current state of our economy, I think we need to look at what are some other options we can offer our employees,” Vickers told the Citizen Patriot.

SOURCES:
The Jackson Citizen Patriot, “Charter school principal: Offering 401(k) instead of state pension has saved jobs,” June 22, 2011

Thomas B. Fordham Institute, “Charting a New Course to Retirement: How Charter Schools Handle Teacher Pensions,” June 22, 2011

FURTHER READING:
Mackinac Center for Public Policy, “Study: State Employee Pension Reform Has Saved Taxpayers Estimated $2.3 Billion to $4.3 Billion in Unfunded Pension Liability,” June 23, 2011

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