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Legality of Teacher Retirement Requirement Before Supreme Court

Nov 03, 2017

In 2010 the legislature passed reforms to teacher retirement pensions and healthcare. Since it was signed into law by Governor Rick Snyder, unions have been fighting against the law, contending that it is unconstitutional.  Specifically, the law stated that a teacher must contribute 3% of their pay towards healthcare benefits in retirement.  The legal question over this contribution has been heard in lower courts; the Court of Claims held the law to be unconstitutional, as did the Court of Appeals.  Following those two decisions, the legislature enacted a law in 2012 that allowed an employee to opt out of retirement health care, thus not having to pay the 3%.  The Michigan Supreme Court vacated the Court of Appeals decision on the 2010 law and sent the case back to the Appeals Court to decide if the 2012 law resolved the unconstitutionality problem with the original law requiring the 3% contribution.  The Court of Appeals did not find the problem to be resolved by the 2012 law.  Following that decisions, the State appealed to the Michigan Supreme Court, who will hear the case on Wednesday, November 8.

Should the Michigan Supreme Court hold the 3% contribution to be unconstitutional, there would be ramifications to the state budget as the state would have to find a way to pay for the portion of the costs that is currently paid by public school employees.

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