Michigan Coalition of State Employee Unions v. State

302 Mich. App. 187
CourtMichigan Court of Appeals
DecidedAugust 13, 2013
DocketDocket No. 314048
StatusPublished
Cited by2 cases

This text of 302 Mich. App. 187 (Michigan Coalition of State Employee Unions v. State) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Michigan Coalition of State Employee Unions v. State, 302 Mich. App. 187 (Mich. Ct. App. 2013).

Opinion

PER CURIAM.

Defendants appeal by right the trial court’s order holding 2011 PA 264 unconstitutional because it violates Const 1963, art 11, § 5. 2011 PA 264 amended the State Employees’ Retirement Act (SERA), MCL 38.1 et seq. Plaintiffs challenged those changes that required employees hired before April 1,1997, who had maintained membership in the state pension system (the “defined benefit pension plan” or “DB plan”) to choose either to contribute 4 percent of their income to that plan or to switch to the 401(k) plan (the “defined contribution plan” or “DC plan,” applicable for state employees hired on or after April 1, 1997) without a required contribution.1 They also challenged the change in the way overtime is applied to the calculation of “final average compensation.”

For the reasons set forth below, we affirm the trial court’s determination that the challenged portions of 2011 PA 264 are unconstitutional because they are incompatible with Const 1963, art 11, § 5. However, we reverse the trial court’s determination that 2011 PA 264 is void in its entirety and remand the case to the trial court for a determination regarding the severability of the remaining portions of 2011 PA 264, pursuant to MCL 8.5. On remand the trial court must determine [191]*191whether any additional portions of the act must be deleted in light of this opinion, and if so, whether 2011 PA 264 can be permitted to stand as redacted.

I. FACTS

A. LEGISLATIVE BACKGROUND OF 2011 PA 264

As an initial matter, we take note of the history of SERA and the State Civil Service Commission (“the Commission”). The Commission was created in 1940 by a voter-initiated amendment to the 1908 Constitution that ended the wasteful spoils system of state employment rampant at the time. Subsequently, and with the Commission’s authorization, the Legislature passed 1943 PA 240, which created SERA, a system for employee retirement benefits. The Commission’s power and authority was subsequently modified by Const 1963, art 11, § 5 when the state Constitution was overhauled in 1963. That provision states, in relevant part:

The commission shall classify all positions in the classified service according to their respective duties and responsibilities, fix rates of compensation for all classes of positions, approve or disapprove disbursements for all personal services, determine by competitive examination and performance exclusively on the basis of merit, efficiency and fitness the qualifications of all candidates for positions in the classified service, make rules and regulations covering all personnel transactions, and regulate all conditions of employment in the classified service.
Increases in rates of compensation authorized by the commission may be effective only at the start of a fiscal year and shall require prior notice to the governor, who shall transmit such increases to the legislature as part of [192]*192Ms budget. The legislature may, by a majority vote of the members elected to and serving in each house, waive the notice and permit increases in rates of compensation to be effective at a time other than the start of a fiscal year. Within 60 calendar days following such transmission, the legislature may, by a two-thirds vote of the members elected to and serving in each house, reject or reduce increases in rates of compensation authorized by the commission. Any reduction ordered by the legislature shall apply uniformly to all classes of employees affected by the increases and shall not adjust pay differentials already established by the civil service commission. The legislature may not reduce rates of compensation below those in effect at the time of the transmission of increases authorized by the commission.

The 2011 PA 264 provisions at issue in this case added language to MCL 38.le, MCL 38.35a, and MCL 38.50a. SERA, as amended by 2011 PA 264, states in relevant part:

Sec le. (1) “Final average compensation” means the average of those years of highest annual compensation paid to a member during a period of 5 consecutive years of credited service; or if the member has less than 5 years of credited service, then the average of the annual compensation paid to the member during the member’s total years of credited service. For a person whose retirement allowance effective date is on or after October 1, 1987, “final average compensation” means the average of those years of highest annual compensation paid to a member during a period of 3 consecutive years of credited service; or if the member has less than 3 years of credited service, then the average of the annual compensation paid to the member during the member’s total years of credited service. Beginning January 1, 2012, compensation used to compute final average compensation shall not include includable overtime compensation paid to the member on or after January 1, 2012, except that a member’s final average compensation that is calculated using any time period on or after January 1, 2012 shall also include, as prorated for the time period, the [193]*193average of annual includable overtime compensation paid to the member during the 6 consecutive years of credited service ending on the same final date as used to calculate the final average compensation or, if the calculation date is before January 1, 2015, the average of the annual includable overtime compensation paid to the member on or after January 1, 2009 and before the final date as used to calculate the final average compensation. [MCL 38.1e(l) (emphasis added).]
Sec 35a. (1) Beginning with the first pay date after April 1, 2012 and ending upon the member’s termination of employment or attainment date, as applicable under [MCL 38.50a], each member who made the election under [MCL 38.50a] shall contribute an amount equal to 4% of his or her compensation to the employees’ savings fund to provide for the amount of retirement allowance that is calculated only on the credited service and compensation received by that member after March 31, 2012. The member shall not contribute any amount under this subsection for any years of credited service accrued or compensation received before April 1,2012. [MCL 38.35a(l) (emphasis added).]
Sec 50a. (1) The retirement system shall permit each member who is a member on December 31, 2011 to make an election with the retirement system to continue to receive credit for any future service and compensation after March 31, 2012, for purposes of a calculation of a retirement allowance under this act. A member who makes the election under this section shall make the contributions prescribed in [MCL 38.35a].
(2) As part of the election under subsection (1), the retirement system shall permit the member to make a designation that the contributions prescribed in [MCL 38.35a] shall be paid only until the member’s attainment [194]*194date [2] A member who makes the election under subsection (1) and who makes the designation under this subsection shall make the contributions prescribed in [MCL 38.35a] only until the member’s attainment date. A member who makes the election under subsection (1) and who does not make the designation or rescinds the designation under this subsection shall make the contributions prescribed in section 35a until termination of employment.
(4)

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Related

Michigan Coalition of State Employee Unions v. State of Michigan
870 N.W.2d 275 (Michigan Supreme Court, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
302 Mich. App. 187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michigan-coalition-of-state-employee-unions-v-state-michctapp-2013.