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Gov. Rick Snyder signed into law September 5 the long-awaited retirement reforms contained in SB 1040, now Public Act 300 of 2012. The law leaves intact a hybrid defined benefit/defined contribution pension system for now, while making changes to address a $45 billion unfunded liability in the system.
Almost immediately following the signing, Ingham County Judge Rosemarie Aquilina issued a restraining order on the 52-day window that school employees were given to make a decision. The American Federation of Teachers (AFT) in Michigan and the Michigan Education Association (MEA) filed the lawsuit on SB 1040 on Friday and had emergency motions ready to go right after the signing.
Aquilina didn't offer a replacement date by which the choices would need to be made. However, a date of Nov. 28 was set to hear arguments about the constitutionality of the law in general. Aquilina declined to sign an order essentially freezing the entire law. Rather, she signed a second order that she said guaranteed employees would be allowed to return to the current system if the new charges went into effect and the law was found later to be unconstitutional.
Governor Synder took the lawsuit in stride, expressing confidence in the constitutionality of the new law.
"With almost everything I do these days, I get sued by someone. I take that as part of the course of the action," Snyder acknowledged today. "But we feel good about our litigation position on these matters. These are smart, good things to do. We're doing it in good faith with the Legislature passing good statutes. So we'll be fine from a judicial point of view."
MPSERS contribution rates paid by school districts are locked in at 24.46 percent of payroll, the same rate as last year.
(Pictured: Brad Biladeau, MASA and Don Wotruba, MASB join Don Olendorf, David Ladd and Matt Tomasiewicz along with Gov. Snyder at the bill signing)