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. 5314

June 15, 1978

RETIREMENT & PENSIONS:

Increase in pension benefits by collective bargaining

TEACHERS:

Increase in pension benefits by collective bargaining

SCHOOLS & SCHOOL DISTRICTS:

Increase in pension benefits by collective bargaining

PUBLIC EMPLOYMENT RELATIONS ACT:

Increase in pension benefits by collective bargaining

The board of education of a school district may not agree, in a collective bargaining agreement, to provide retirement benefits beyond those established by the statutory public school employees retirement system.

Honorable Lucille H. McCollough

State Representative

The Capitol

Lansing, Michigan

Honorable William R. Keith

State Representative

The Capitol

Lansing, Michigan

Honorable James A. Barcia

State Representative

The Capitol

Lansing, Michigan

In a joint letter from Representatives McCollough and Keith and a separate letter from Representative Barcia, you have requested my opinion on two questions which may be phrased as follows:

1. May a board of education agree, in a collective bargaining contract, to provide supplemental retirement benefits to current employees when they retire?

2. Once a board of education has agreed to provide supplemental retirement benefits to current employees when they retire, may such benefits be diminished by subsequent collective bargaining contracts?

In answering your first question, it should be observed that the legislature has established retirement systems for public school employees that include all school districts in the state. See 1945 PA 136, MCLA 38.201 et seq; MSA 15.893(1) et seq. The Chapter 1 retirement system created thereunder includes all school districts, other than the School District of the City of Detroit, and certain other public educational institutions. The Chapter 2 retirement system includes the employees of the School District of the City of Detroit as the only first class school district in the state. Both the Chapter 1 and Chapter 2 retirement systems are noncontributory systems financed by board of education appropriations and legislative appropriations of state funds. Any retirement benefits provided at the local level by boards of education would be in addition to the retirement benefits already provided for in 1945 PA 136, supra.

In Detroit Police Officers Association v City of Detroit, 391 Mich 44, 214 NW2d 803 (1974), the Michigan Supreme Court held that municipal pension and retirement benefits are mandatory subjects of collective bargaining under the Public Employees Relations Act, 1947 PA 336, Sec. 15, MCLA 423.215; MSA 17.455(15). In reaching that result, the Court noted that under the home rule cities act, 1909 PA 279, MCLA 117.1 et seq; MSA 5.2071 et seq, the city charter need only obtain a general grant of authority to city government to maintain a retirement system. The substantive provisions of the retirement system could be determined locally through the collective bargaining process.

However, the Court, in Detroit Police Officers Association v City of Detroit, supra, 391 Mich at p 66, 214 NW2d at p 814, also stated '. . . that PERA [1947 PA 336, as amended, supra,] contemplates open negotiations between the parties unless controlled by a specific state law. . . .' (emphasis supplied) In contrast, 1945 PA 136, supra, is a controlling statute in which the legislature has enumerated specific retirement benefits for public school employees. Further, the law is settled that retirement systems must be administered in conformity with the statutes creating such retirement systems. Stover v Retirement Board of the City of St. Clair Shores Fireman and Police Pension System, 78 Mich App 409, 206 NW2d 112 (1977) leave to appeal denied, 402 Mich 879 (1978); Michigan State Police Command Officers' Association, Inc. v Department of Public Safety, 80 Mich App 278, ... NW2d ... (1977) leave to appeal denied, Mich ..., (March 22, 1978). Thus, local boards of education may not agree, in a collective bargaining agreement, to provide supplemental retirement benefits to current employees when they retire. (a1)

It is my opinion, therefore, that local boards of education may not agree, in a collective bargaining agreement, to provide supplemental retirement benefits to current employees when they retire. Rather, the legislature has established statutory public school employee retirement systems for public school employees to provide uniform retirement benefits for persons with comparable service credit and final average compensation.

The answer to your first question obviates the need to address your second question.

Frank J. Kelley

Attorney General

(a1) OAG, 1971-1972, No 4732, P 66 (December 29, 1971), held that the Civil Service Commission may adopt a retirement plan supplementing the retirement system for state employees created by the legislature. However, the Civil Service Commission is empowered by Const 1963, art 11, Sec. 5 to establish rates of compensation, which includes fringe benefits, of state classified employees. In contrast, boards of education have only such powers as are conferred by statute. Const 1963, art 11, Sec. 5 and Senghas v L'Anse Creuse Public Schools, 368 Mich 557; 118 NW2d 275 (1962).