Part of Michigan school retiree plan put on hold

By AP

LANSING, MI – Part of a state plan to save money through changes to Michigan's public school employee retirement system is on hold pending the outcome of a court challenge.

A preliminary injunction granted Monday by Ingham County Circuit Judge James Giddings allows the collection of 3 percent of school employee salaries to start as scheduled later this week.

But Giddings says the money can't be spent and will be placed in a separate account pending the case's outcome.

Teachers' unions have sued to overturn the provision in a new state law requiring employees to pay into a retiree health care fund.

The suit doesn't affect plans for 17,000 school employees to retire this summer with slightly sweetened pensions.