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6:16 pm
Fri June 25, 2010

Union challenges Michigan school retiree plan

DETROIT –

The Michigan chapter of the American Federation of Teachers is challenging parts of the state's new law related to the public school employee retirement system.

The union said Friday its lawsuit in Wayne County Circuit Court challenges a provision requiring employees who don't retire this summer to start paying an extra 3% of their compensation into a fund for retiree health care starting July 1.

The union also is challenging a provision where new teachers will be put in a new retirement plan, claiming the Legislature unfairly classified new hires.

Republican Senate Majority Leader Mike Bishop has said the new law is on safe legal ground.

The state announced Friday that 17,063 applied to retire this summer, saving an estimated $515 million the first year.