What is the latest on our 3% that was taken out?
MEA Wins Appeals Court Ruling in Hard-Fought 3 Percent Retirement Case
Submitted by mgarcia on Tue, 06/07/2016 - 16:21
Once again a Michigan Appeals court has ruled in favor of MEA and AFT Michigan in the so-called 3 percent case involving unconstitutional deductions taken from school employees’ paychecks from 2010-12 to fund future health care in retirement.
The case illustrates the power of standing together and taking collective action, as the litigation has stretched over five years and across several appeals by the State of Michigan. We have prevailed at every juncture.
Many questions remain – such as how or when affected school employees could be reimbursed from a pot of more than $550 million that has been sitting in escrow during nearly five years of litigation. MEA lawyers are reviewing the decision, so stay tuned for updates in the coming days and weeks.
Like many MEA members, Brenda Wilcox-Kronner – a high school social worker with L’Anse Creuse Public Schools – is impatient to get her money back. “It is money I worked for, and it was taken away from me illegally. I demand my money back with interest!”
MEA, along with AFT Michigan, filed suit soon after the 2010 passage of PA 75, which mandated school districts withhold 3 percent of each employee’s wages for retiree health care. Both the trial court and Court of Appeals agreed the law violated state and federal constitutional protections involving the taking of private property without compensation, due process, and impairment of contracts.
Following those losses, the state asked the Supreme Court to hear the case. Instead, the Supreme Court sent the case back to the Court of Appeals for further consideration, which resulted in today’s ruling.
In 2012, state lawmakers passed a replacement law, PA 300, which was upheld by the Supreme Court last April.
Submitted by mgarcia on Thu, 11/05/2015 - 16:05
EAST LANSING, Mich., November 5, 2015 – The Michigan Education Association today filed a brief with the Michigan Court of Appeals in opposition to Public Act 75 of 2010. PA 75 mandated school districts withhold 3 percent of each employee’s wages for retiree health care. Immediately following passage of that legislation, the MEA and the American Federation of Teachers Michigan filed suit challenging the constitutionality of PA 75 – and have been fighting the legal battle ever since.
'3 percent case' sent back to MI Court of Appeals for reconsideration
The Michigan Supreme Court is sending the "3 percent case" back to the Michigan Court of Appeals for reconsideration. The case involves the constitutionality of PA 75 of 2010 to require all school employees to pay an extra 3 percent into a fund for retiree health insurance. The Court vacated the prior ruling of the Michigan Court of Appeals which agreed with the Court of Claims that the practice is unconstitutional. The state Supreme Court is sending the case back to the appeals court for reconsideration.
The Court of Appeals must also consider what issues in PA 75 have been superseded by the Supreme Court's decision in the PA 300 case. And they are to deal with any outstanding issues that may emerge regarding PA 75 that were not affected by PA 300.
The remand order is based on the Supreme Court's April 8 ruling inAFT MI, et al v. State of Michigan regarding PA 300 of 2012. The Supreme Court upheld the Court of Appeals' decision that the law-which requires public school employees to pay at least 20 percent of their retiree health care premiums, along with other changes to retirement contributions-was not unconstitutional.
MEA challenged PA 75 and PA 300.
Frequently Asked Questions Regarding the Michigan Public
School Employees Retirement Act Litigation (June 4, 2015)
1. What is the Michigan Public School Employees Retirement Act (MPSERA)?
The MPSERA, also known as Public Act 300 of 1980, as amended, is a Michigan statute that established a retirement plan for public school employees and other qualifying individuals.
2. Who is a member of the plan? You become a member and begin accruing credit toward a pension on the first day you work in a participating Michigan educational institution. Members include employees of:
· K-12 public school districts
· Intermediate school districts
· District libraries
· Public School Academies/Charter Schools
· Tax-supported community colleges
In some instances, membership includes certain employees who began working for Central, Eastern, Northern, and Western Michigan Universities, Ferris State and Lake Superior State Universities, and Michigan Technological University, before January 1, 1996.
3. What changes happened in 2010 to the MPSERA? In 2010, the Michigan legislature enacted Public Act 75 which amended the MPSERA. The amendments, in part, require public school districts and other reporting units to withhold 3% of each employee’s wages and remit the amount to Michigan Public School Employees Retirement System (MPSERS) as “employer contributions” to the trust that funds retiree health care benefits.
4. Did litigation result? Yes. The MEA and AFT Michigan filed suit in the Michigan Court of Claims challenging the constitutionality of Public Act 75. The trial court granted summary disposition to the MEA and AFT Plaintiffs. The Court also ordered that the withheld wages be placed in an interest-bearing account, rather than the MPSERS trust, and that the funds be maintained there until the legal challenge was resolved. The State appealed to the Michigan Court of Appeals. The Michigan Court of Appeals concluded that Public Act 75 violated multiple constitutional rights set forth in both the United States and Michigan Constitutions and was, therefore, invalid. Specifically, the Court concluded that the statute violated federal and state constitutional protections against the impairment of contracts by the state and the taking of private property by the government without compensation, as well as the constitutional guarantee of substantive due process. The state of Michigan filed an Application for Leave to Appeal with the Michigan Supreme Court which is still pending.
5. What changes happened in 2012 to the MPSERA? In 2012, the Michigan legislature enacted Public Act 300 which amended the MPSERA. Public Act 300 requires all actively employed members of MPSERS to make certain elections regarding their pensions and retiree benefits.
6. Did litigation result? Yes. The MEA and the AFT Michigan filed suit in the Michigan Court of Claims. The Court of Claims found that the election period was unreasonable, but in all other respects found Public Act 300 to be constitutional. The MEA and AFT Michigan appealed. On January 15, 2014, a panel of the Michigan Court of Appeals found that Public Act 300 did not violate the law. The lawsuit challenged changes by the Michigan legislature to pension contribution rates, retiree healthcare contributions, the multiplier “sanction” for those opting out of the higher contribution rates, and the mechanism for refunding the contributions to individuals who opted into retiree healthcare but ultimately failed to qualify for the benefits. The MEA and AFT Michigan primarily argued that the legislative changes violated the Michigan and US Constitutions. The Court of Appeals held that Public Act 300 does not diminish or impair a member’s vested pension benefits as only future benefits are implicated. As to retiree health insurance, because the member can choose to either continue to participate in the retiree healthcare program and contribute 3% or opt out, no impairment exists. The AFT Michigan in partnership with the MEA filed an application for leave to appeal with the Michigan Supreme Court.
7. What has happened in the Supreme Court regarding these cases? On May 22, 2014, the Michigan Supreme Court issued two orders regarding the cases filed by the Michigan Education Association, the AFT Michigan, and others dealing with changes enacted by the Michigan legislature in 2010 and 2012 to the MPSERA. Regarding the 2012 amendments to the Retirement Act (Public Act 300), the Court granted leave to appeal the decision of the Michigan Court of Appeals that upheld the constitutionality of Public Act 300. “Leave to appeal” means the Supreme Court will hear the case and decide whether it was lawful for the legislature to mandate school employees to choose whether they would opt in or opt out of their current retirement benefit program including retiree health benefits. As to the 2010 amendments to the Retirement Act (Public Act 75), the Court ordered those applications for leave to appeal be held in abeyance pending the outcome of the case involving the 2012 amendments. This will result in the escrowed member contribution of 3% to continue to be held in escrow while the Court decides the outcome of Public Act 300. On April 8, 2015, the Supreme Court issued its decision finding that 2012 PA 300 was constitutional.
8. Does this mean that the decision regarding Public Act 300 will decide Public Act 75? The Court stated in the Order dated May 22, 2014 that the decision in Public Act 300 “may resolve an issue raised” in the Public Act 75 case. However, in April 8, 2015 final decision regarding PA 300, the Court noted “we emphasize that we address in this case only 2012 PA 300 and do not decide whether the Court of Appeals correctly held that 2010 PA 75 violated those same provisions.”
9. Who is impacted by the Supreme Court’s decision regarding Public Act 300? All MPSERS members affected by the 2012 amendments.
10. What is the status of the 2010 PA 75 case? The application for leave to appeal filed by the state of Michigan is still pending.
11. When will the Supreme Court act on the application for leave to appeal in the PA 75 case? There is no set time limit for the Court to decided applications for leave to appeal.
Posted on 05/27/14 at 2:26pm
Michigan’s Supreme Court will be deciding on whether the changes made to PA 300 in 2012 were legal. The lawsuit challenges changes by the Michigan legislature to pension contribution rates, retiree healthcare contributions, the multiplier “sanction” for those opting out of the higher contribution rates, and the mechanism for refunding the contributions to individuals who opted into retiree healthcare but ultimately failed to qualify for the benefits.
Posted on 08/13/13 at 2:20pm
It’s not yet known when — or if — MEA members will receive refunds of a “retirement tax” imposed upon them by the state Legislature.
Posted on 04/12/13 at 4:54pm
Two major cases affecting MEA members’ retirement benefits are slowly making their way through the state’s court system, and it’s not yet known when — or if — members will receive refunds of a “retirement tax” imposed upon them by the state Legislature.
- See more at: http://mea.org/retirement-news#sthash.tg48lQep.dpuf
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