LANSING, Mich. — A judge ruled Monday that a new law requiring public school employees to pay 3 percent of their wages into their retirement health care is unconstitutional, according to the Detroit Free Press.

Michigan Court of Claims Judge James Giddings ruled that the law is “arbitrary and capricious” because teachers are required to pay into the system, but aren’t guaranteed health benefits when they retire, the Free Press reported.

If the ruling stands, it will force school districts to pay a combined $300 million more for retiree health care than they planned, the Free Press reported.

A spokeswoman for Gov. Rick Snyder said the state will appeal. The law was adopted during former Gov. Jennifer Granholm’s administration as part of a plan to balance the state budget by offering eligible teachers an incentive to retire by mid-2010, but requiring those remaining to pay the 3 percent contribution, the Free Press reported.

SOURCE:
The Detroit Free Press, “Judge rules teacher retirement health care law unconstitutional,” April 5, 2011

FURTHER READING:
Mackinac Center for Public Policy, “Comparing Michigan Private-Sector Pensions to MPSERS’ and MSERS’ Pensions,” Oct. 25, 2010

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