HEADLINES : Michigan

Mandating state workers pay 4 percent for pensions unconstitutional, judge rules

The Detroit News | by Chad Livengood | October 1, 2012

Lansing - An Ingham County judge ruled unconstitutional Friday a law forcing 19,000 veteran state workers to pay 4 percent of their annual salary to maintain their pensions.

Ingham County Circuit Judge Joyce Draganchuk said Public Act 264 violates the Michigan Civil Service Commission's authority to set pay and benefits for classified state employees.

Starting April 1, about 20,000 state workers hired before March 31, 1997, had to choose between contributing 4 percent of their pay to the state pension fund or have their pension benefit frozen and be forced into a defined contribution retirement plan.

"By mandating that members contribute four percent of their compensation to the employees' savings fund, the Legislature reduced the compensation of classified civil servants - an act that is within the sphere of authority vested in the (Civil Service Commission)," Draganchuk wrote in a 12-page decision released Friday.

Gov. Rick Snyder and the Republican-controlled Legislature passed the measure in 2011 as part of an effort to slash $5.6 billion from a $15 billion unfunded liability in the pension fund that supports about 50,600 retired state workers, said Kurt Weiss, spokesman for the state Department of Technology, Management & Budget.


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