(MI) Judge strikes down law affecting long-term state employees' pensions

[Bozita]

Source: MLive

Judge strikes down law affecting long-term state employees' pensions
By David Eggert | [e-mail]
on September 28, 2012 at 12:07 PM



LANSING, MI - An Ingham County judge on Friday struck down a requirement that long-term state employees contribute 4 percent of their pay to stay in a defined benefit pension plan as opposed to switching to a 401(k)-style system.

The ruling by Circuit Judge Joyce Draganchuk is a win for workers hired before April 1, 1997, who get a traditional pension benefit. All new hires after that qualify for a defined contribution plan.

The Snyder administration is likely to appeal the decision because the provision was designed to cut long-term unfunded liabilities for pension costs.

Under a Republican-backed law signed by Gov. Rick Snyder in December, the long-term employees in April began paying 4 percent of their salary to have their pension benefit continue to grow. They could avoid paying the fee if they agreed to have their pension frozen at current levels and switch to the 401(k)-style benefit.


Read more: http://www.mlive.com/news/index.ssf/2012/09/judge_strikes_down_law_affecti.html#incart_flyout_news

[Lasher]

1. Why not offer both, a 401(k) and a DBPP?

They'll need it when they get to retirement age.

[musiclawyer]

2. If you are going to limit defined benefits then jack up the pay so people invest themeselves

The public sector was buillt upon lower wages than private sector in exchange for assured retitrement based on years in service.

Many local elected officials could not balance a checkbook over the years and this was used as cover by the GOP to wage war on the public sector. You want civil servants who do not pay into social security, but rather pay into a state or city retirment plan to take lower benefits, then start paying more, and offer private style 401ks if you wish

Many state andf local plans wert too generous admittedly. But it's cheaper to have a stable competent civil service more immune to graft and corruption than have a race to the bottom like the private sector.