State Employee 3% Retirement Contribution to be Returned

On December 14, 2011 the Michigan Supreme Court upheld the ruling by the Michigan Court of Claims that the State of Michigan violated the Michigan Constitution when it started deducting 3 percent towards state employee retirement healthcare.  The Governor has stated that the collection of the 3 percent pension contribution will end with the pay period ending December 24, 2011.  The courts had ordered that the contributions be held in escrow pending the final outcome of the lawsuits filed by SEIU and the other state employee unions.  This order does not apply to school employees who are under a separate lawsuit.  There has been no decision in that case.

In SEIU Local 517M v. State Employees’ Retirement System (SC docket No. 143829), the Supreme Court issued a standard order rejecting the request to hear the state’s appeal, saying, “(W)e are not persuaded the question presented should be reviewed by this court.”

The refund of the funds, with accumulated interest, will appear in the January 19, 2012 paychecks.

We have included a link to a Question and Answer chart on the refund:

Also read the Governor’s Press Release concerning the refund of the 3 percent and his December 15th signing of HB 4701 and HB 4702 dealing with state employee retirement changes:,4668,7-277-57577_57657-267518–,00.html

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