Appeals Court Sides With Snyder Over Teachers' Unions On Retirement Contributions

Jan 15, 2014

Public school employees will continue to pay more for retirement and health benefits under a ruling by the Michigan Court of Appeals. The unanimous decision upholds a 2012 law that was challenged by teachers’ unions.

The teachers’ unions say the law violates the Michigan Constitution by changing the terms of their contracts with school districts. The law requires public school employees hired before 1990 to hand over four percent of their pay. Before, they contributed nothing. Teachers and support staff hired after 1990 have to pay an even bigger share of their paychecks.

It’s either that or their benefits are reduced, or they are moved into 401 (k) plans.

The court of appeals says that does not amount to an illegal seizure of teachers’ paychecks.

This law has been a big point of tension between teachers unions and Governor Rick Snyder’s administration. The administration says the law saves the state $15 billion dollars in legacy costs.