No retirement contribution refund for public school employees

As of right now, public school employees will not be getting a refund of their 3 percent retirement contribution that state employees are getting. We are still awaiting a decision on our issue from the Michigan Court of Appeals who heard oral arguments on Oct. 19.

MEA sponsored the challenge to the 3 percent contribution as unconstitutional under various provisions of the Michigan and United States constitutions. We won the case, McMillan v Michigan Public School Employees Retirement System, before the Michigan Court of Claims. The state appealed to the Michigan Court of Appeals who has yet to issue a decision.

The state employees challenged the constitutionality of their  3 percent contribution under a provision in the Michigan Constitution which gave authority to the Civil Service Commission to establish the wages and benefits of classified civil service employees—not public school employees. The Michigan Court of Appeals ruled in favor of the employees. Since, the state Supreme Court refused to hear an appeal by the state, state employees will get their refund next month.

Last week, Gov. Snyder signed legislation that allows the return of the state employees’ 3 percent retirement contribution, but, at the same time, requires them to pay 4 percent if they stay in the current defined benefit retirement plan. If state employees move to a 401(k) defined contribution plan, there is no contribution.