STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5203

August 2, 1977

CONSTITUTIONAL LAW:

Equal protection.

RETIREMENT AND PENSIONS:

Failure of the Public School Employees Retirement System to provide service credit for service in a state accredited nonpublic school.

The failure of the Public School Employees Retirement System to provide retirement credit for service in a state accredited nonpublic school does not violate constitutional equal protection guarantees.

Honorable David C. Hollister

State Representative

The Capitol

Lansing, Michigan

You have requested my opinion on a question which may be stated as follows:

1945 PA 136, supra, is known as the Public School Employees' Retirement Act. Basically, this statute provides for two retirement systems for public school employees. 1945 PA 136, Ch I, supra, created the Chapter I or 'out-state' retirement system for all public school employees other than those employed by a school district of the first class. 1945 PA 136, Ch II, MCLA 38.301 et seq; MSA 15.893(41) et seq, created the Chapter II or 'Detroit' retirement system for all employees of a school district of the first class. Currently, there is only one school district of the first class, the School District of the City of Detroit.

These two retirement systems have operated independently over the years. However, with the passage of 1974 PA 259, the legislature began the process of merging Chapter II into the Chapter I retirement system. The major step towards full merger made by 1974 PA 259 was to vest the administration of both systems in the Public School Employees' Retirement Board, which had previously administered only the Chapter I system.

As noted in your opinion request, 1945 PA 136, supra, provides for the crediting of military service and out-of-system service under certain circumstances. For example, 1945 PA 136, Ch I, Sec. 14 and Ch II, Sec. 18b, supra, authorize military service credit for retirement system members.

Members of the Chapter I retirement system may obtain service credit for out-of-system service as public school employees in other states pursuant to 1945 PA 136, Ch I, Secs. 1(j) and 16b, supra. Members of the Chapter II system may obtain service credit for out-of-system service as public school employees in other states pursuant to 1945 PA 136, Ch II, Sec. 19b(1), (c), supra.

Thus, 1945 PA 136, supra, provides service credit for military service and out-of-system service credit for service as a public school employee in another state. The statute does not provide out-of-system service credit for service as a private employee in nonpublic schools. Clearly, the classification involved herein is between public employment for the government and private employment in nonpublic schools. This classification must be tested against the equal protection clauses of the United States and Michigan constitutions.

The Fourteenth Amendment to the United States Constitution states in pertinent part:

Const 1963, art 1, Sec. 2 also affords equal protection to the people of the state of Michigan. It provides:

The equal protection guarantee of the Michigan Constitution, Const 1963, art 1, Sec. 2 affords the same rights as the Equal Protection Clause of the Constitution of the United States, US Const, Am XIV. Wolodzko v Wayne Circuit Judge, 382 Mich 528, 534; 170 NW2d 9, 12 (1969). Thus, we must decide whether the foregoing classification, which fails to provide out-of-system service credit to state certified teachers teaching in state accredited nonpublic schools, grades K-12, violates our constitutional equal protection guarantees.

The proper standard in analyzing the foregoing equal protection question is the traditional 'rational basis' test set out in Dandridge v Williams, 397 US 471, 485; 90 S Ct 1153, 1161; 25 L Ed 2d 491, 501-502 (1970):

In my opinion, the distinction between public service for the government and private employment in nonpublic schools, in terms of out-of-system service credit, under 1945 PA 136, supra, does not constitute an invidious discrimination. Indeed, Const 1963, art 8, Sec. 2, which directs the legislature to maintain and support a system of free public elementary and secondary education while prohibiting legislative appropriations to nonpublic elementary and secondary schools, represents a valid classification between public and nonpublic schools. Traverse City School District v Attorney General, 384 Mich 390, 429; 185 NW2d 9, 27 (1971). This constitutional distinction forms a rational basis for the classification established by the legislature. Thus, it cannot be said that the failure of 1945 PA 136, supra, to provide out-of-system service credit to state certified teachers teaching in state accredited nonpublic schools, grades K-12, violates our constitutional equal protection guarantees. It is, therefore, my opinion that 1945 PA 136, supra, is not violative of the equal protection guarantee under the Fourteenth Amendment of the United States Constitution or Const 1963, art 1, Sec. 2.

The question of whether to provide out-of-system service credit for members of the retirement systems for their prior service as employees in state accredited nonpublic schools is for the legislature to determine.

Frank J. Kelley

Attorney General