LANSING, Mich. — Five members of the Michigan Education Association have filed suit over a new requirement that school employees pay more into a retiree health care fund, but they are not challenging the part of the new law that awards higher pension benefits to recent retirees, according to the Associated Press.
The MEA said that the class-action suit seeks to overturn the mandated additional 3 percent of compensation that employees must begin paying July 1, according to AP.
Both provisions are part of a state attempt to save money. The state offered slightly higher pension benefits to entice senior teachers to retire by this month, anticipating that school districts would save money now by not replacing those educators or by replacing them with lower-paid beginning teachers. Long-term savings are expected through the higher contributions to retiree health plans from remaining employees, AP reported.
The suit claims the contribution violates the contract formed when the Michigan Public School Employees Retirement System was set up in 1980, AP reported. The MEA said the new law requires employees to contribute to the fund with no guarantee that the health insurance benefits will be available to them when they retire, according to AP.
Republican Senate Majority Leader Mike Bishop told AP that the new law is on safe legal ground.
“At some point in time, the people in this state are going to get awfully upset with the MEA for standing in the way of whatever progress we've been able to make,” Bishop told AP.
The suit was filed in the Michigan Court of Claims, which is staffed with Ingham County Circuit Court judges, according to AP.
The Associated Press, “Suit challenges part of Mich. school retiree plan,” June 16, 2010
Michigan Capitol Confidential, “MEA Wounds Governor’s School Pension Reform,” May 1, 2010