MEA, AFT score wins against SB 1040

The Governor's ink was barely dry on PA 300 (originally SB 1040) yesterday afternoon when MEA and AFT/Michigan were in court winning two temporary restraining orders on parts of the new law. Judge Rosemarie Aquilina issued the TROs and promised a full hearing on the constitutionality of the new law this fall.

AFT/Michigan filed its suit challenging the length of time MPSERS members have to make decisions about their pension plans and the constitutionality of pension benefit changes under SB 1040. According to the law, members have from Sept. 4 to Oct. 26 to decide if they will pay more for their pensions or not. Aquilina ruled the time period was unreasonably short. As a result, the specific ending period for making a choice will be determined by the court.

MEA's lawsuit challenges the constitutionality of the changes to the pension and retiree health benefits. If members want retiree health care benefits, they would have to continue to pay 3 percent under the law. Aquilina's granting of the TRO in this case declares that any elections made can be rescinded or changed if the court ultimately finds that either the pension portion or retiree health portion--or both--are unconstitutional.

The new law forces school employees to decide whether they want to make much larger pension contributions or take a reduced pension. PA 300 also requires a 20 percent health care contribution from current retirees. New hires won't be getting any retiree health care and instead will be put into a hybrid health care account plan. And the law commissions a study to examine whether moving employees to a defined contribution plan is cost effective.

Aquilina consolidated the two lawsuits so they will be considered and decided together. AFT and MEA will have the chance to file briefs on the constitutionality of SB 1040. Oral arguments are scheduled for Nov. 28.

Go to www.mea.org/retirement for information on SB 1040 and its impact. MEA will keep you updated as these lawsuits travel through legal channels.