Three Percent Contribution Ruled Unconstitutional - But No Money Back Guarantee

The Michigan Court of Appeals has ruled that the 2010 law requiring public school employees to contribute 3 percent to retiree health care is unconstitutional. However, this doesn't mean you're getting your earnings back just yet.

While the decision was marked by a 2-1 vote, it's likely to be appealed once again and this time head to the Michigan Supreme Court. MASSP will continue to keep you updated on this topic as any changes occur.

For more information on the Court of Appeals ruling, keep reading:

Judges Douglas Shapiro and Jane Beckering said the statute had sweeping violations of the U.S. and Michigan constitutions. Their majority opinion stated the following:

“Specifically, we conclude that the statute violates federal and state constitutional protections against state impairment of contracts, the taking of private property by the government without compensation as well as the constitutional guarantee of substantive due process. The prohibition against governmental impairment of contracts is violated because the statute requires that school employees be paid 3 percent less than the amount they and their employers freely agreed upon in contracts. The prohibition against the taking of private property is violated because the [law] does not merely create a general obligation on the part of active employees to pay a certain sum, but instead directs that unique and definable monies in which plaintiffs have a property interest be confiscated by their government employers.

“Moreover, the confiscated wages are then used to pay the statutory-mandated employers’ contributions to a state fund. Finally, while the fund in question funds health benefits for present retirees, the active employees whose wages are taken, have no vested right themselves to receipt of health benefits upon their own retirement.”