About 18,000 workers employed by the state of Michigan won a court ruling knocking down a pension fee this week, but the state says it plans to keep collecting the 4 percent levy while it considers whether to appeal.
The state Court of Appeals on Wednesday ruled that part of a 2011 law designed to ensure that the pension plan covering employees hired before 1997 remained solvent violated the constitution.
Despite the ruling, Kurt Weiss, a spokesman for the state's Department of Technology, Management and Budget, told LivinstonDaily.com that the state would continue to collect the fees while considering whether to appeal to the Michigan Supreme Court.
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So far, the state has collected $59.1 million, the website reported.
"I don't know for sure if they'll appeal," said Ray Holman, spokesman for the UAW Local 6000, which represents 17,000 state employees. "But I am pretty sure they will."
Holman, whose union was part of a coalition that filed suit against the law, noted that a similar law involving a 3 percent fee deducted from state employees for retirees' health care was signed into law in 2010. It, too, was declared unconstitutional. The money collected was refunded to employees after the state's appeals were exhausted.
This week's ruling by a three-judge panel hinged on the unions' contention that only the state Civil Service Commission had authority over state employees' compensation, including retirement benefits.
The state contended that because employees had the choice of paying the fee or moving to a defined contribution plan, it had the authority to impose the change. Only about 600 employees opted out of the pension plan.
The bill was signed into law by Gov. Rick Snyder, who wanted to trim the $15 billion unfunded liability in the pension fund by $5 billion.
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