The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 5188

May 5, 1977

RETIREMENT:

Dismissal from service for misconduct.

A member of the state employees retirement system discharged from state employment for conviction of a misdemeanor involving state property is entitled to receive retirement benefits.

Mr. Stephen Van Note

Director

Bureau of Retirement Systems

Department of Management & Budget

Lansing, Michigan 48913

You ask for my opinion as to whether a member of the State Employees' Retirement System (1) who meets the age and credited service requirements of the Act, Sec. 19; MCLA 38.19; MSA 3.981(19), but who was discharged from state employment because of a conviction of a misdemeanor involving state property, is entitled to receive a retirement allowance.

The Supreme Court has held that a state employee discharged for misconduct is not entitled to retirement benefits. Jackson v State Employees Retirement System, 358 Mich 247; 99 NW2d 572 (1959) (dictum); Van Coppenolle v Detroit, 313 Mich 580; 21 NW2d 903 (1946). In addition, three opinions of the Attorney General have also ruled that such a state employee is not entitled to retirement benefits. OAG, 1945-1946, No 0-4753, p 732 (June 19, 1946); 1 OAG, 1955, No 2147, p 415 (August 12, 1955); 2 OAG, 1960, No 3158, p 62 (April 1, 1960). These opinions, however, were issued before the 1963 Constitution. Currently, Const 1963, art 9, Sec. 24, provides:

'The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.'

The question is, therefore, whether Const 1963, art 9, Sec. 24, has resulted in a change of the result reached in the three Attorneys Generals' opinions and in Jackson and Van Coppenolle.

In Advisory Opinion re Constitutionality of 1972 PA 258, 389 Mich 659, 662-663; 209 NW2d 200, 202 (1973), the Court said:

'It had long been the general rule that pensions granted by public authorities were not contractual obligations but gratuitous allowances which could be revoked at will by the authority because the pensioner was not deemed to have had any vested right in their continuation. See 54 ALR 943.

'Michigan has subscribed to that principle in Attorney General v. Connolly, 193 Mich 499 (1916) Brown v Highland Park, 320 Mich 108 (1948) and Van Coppenolle v Detroit, 313 Mich 580 (1946).

'In Brown and Van Coppenolle, supra, retirement benefits of employees were decreased (Brown) and terminated, (Van Coppenolle) after the employees had completed their prescribed period of employment and had begun to receive retirement benefits.

'That it was the intention of the framers of the constitution to obviate this harsh rule is apparent from the minutes of the convention:

"MR. VAN DUSEN:

Now, it is the belief of the committee that the benefits of pension plans are in a sense deferred compensation for work performed. And with respect to the public employee should have a contractual right to benefits of the pension plan, which should not be diminished by the employing unit after the service has been performed.' (1 Official Record, Constutional Convention 1961, 770-771.)

'We are satisfied that such was the intention of the people in adopting it.'

It is my opinion, therefore, that OAG Nos 0-4753, 2147 and 3158, supra, and Jackson, supra, and the holding in Van Coppenolle, supra, have been superseded by Const 1963, art 9, Sec. 24, as interpreted by Advisory Opinion, supra. Therefore, in the absence of legislation imposing a condition of faithful performance (2), the applicant who meets the age and credited service requirements of the Act, Sec. 19, may not be denied a retirement allowance because he was discharged from state employment because of a conviction of a misdemeanor involving state property.

Frank J. Kelley

Attorney General

(1) See 1943 PA 240, as amended; MCLA 38.1 et seq; MSA 3.981(1) et seq, hereafter, the 'Act.'

(2) In Advisory Opinion, supra, 389 Mich at 663, it was held that the legislature may attach new conditions for earning financial benefits which have not accrued without contravening the provisions of Const 1963, art 9, Sec. 24. I express no opinion as to whether 'faithful performance' is such a new condition.