The Republican governor signed the overhaul of the Michigan Public School Employees Retirement System on Tuesday. The GOP-led Senate and House passed the legislation this year.
Officials said the measure cuts at least $15 billion from a $45 billion liability on the system. The reductions include a $130 million contribution by the state toward retirement costs.
At the signing ceremony, Snyder also said he'll appeal an August state Court of Appeals decision that found Michigan's 3 percent payroll deduction for school employees unconstitutional.
The state has collected $508 million since 2010 from 227,000 public school employees to finance retiree health care.