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Worker pension contributions ruled unconstitutional

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August 15, 2013

By Brittany Clingen

Michigan

Lansing, Michigan: In 2011, the Michigan legislature, with support from Gov. Rick Snyder, passed Public Act 264 in an attempt to reign in the state's $15 billion unfunded pension liabilities. Public Act 264 sought to change how pensions were calculated and have workers either switch to a defined contribution plan or pay four percent of their earnings into the pension plan. On Wednesday, August 14, 2013, the Michigan Court of Appeals ruled that requiring the state's public employees to contribute four percent of their earnings into the pension plan and altering the method by which pensions are calculated violate the state constitution. The court unanimously ruled that making decisions such as those outlined in Public Act 264 is the duty of the Civil Service Commission. The state could still appeal the court's decision. Joy Yearout, a spokeswoman for the Attorney General's office, said, "The ruling is under review at this time."[1][2]

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