Court Upholds Law Requiring State Workers to Pay to Pensions


By David Eggert,

July 29, 2015

The Michigan Supreme Court has upheld a law requiring state employees to contribute a portion of their pay to qualify for a full pension in retirement.

Justices ruled Wednesday that the 2011 law does not infringe on the Civil Service Commission’s powers because voters did not consider pensions or other fringe benefits to be “compensation” when they ratified the state constitution in 1963.

The 6-1 ruling reversed a 2013 appeals court decision that declared the law unconstitutional.

The law gave veteran employees with pensions a choice: pay 4 percent to stay in the plan or freeze the pension benefit and move to a 401(k).

About 16,000 current state employees hired before April 1997 are contributing to get a full pension. Those hired since then are automatically in a 401(k)-style plan.

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