On September 20, the Michigan Court of Appeals issued an opinion regarding the calculation of pension benefits in the case of Macomb Co v AFSCME Council 25 Locals 411 & 893 (Docket No. 296416, for publication), affirming the Michigan Employment Relations Commission's (MERC) ruling in favor of the unions.
Macomb County has an Employees Retirement System Ordinance, which provides pension benefits for employees who are members of the system. Under the ordinance, an independent retirement commission decides (among other things) which mortality tables are used to calculate pension benefits. Since 1982, the County had used mortality rates of 100% female/0% male to calculate joint and survivor pension benefits. However, in 2006, the County's retirement commission adopted a new mortality table with rates of 60% female/40% male, resulting in lowering of monthly retirement benefits for those under the joint and survivor pension. The employees (charging parties) demanded bargaining over this change. The County rejected the demand, and the charging parties filed Unfair Labor Practice charges with MERC, asserting violation of the Public Employee Relations Act (PERA).
MERC ruled that, under PERA, the County has a duty to bargain over the method by which the joint and survivor pension benefits are determined, and that the 24-year practice of using the 100% female mortality table constituted a tacit agreement that the practice would continue where a key term in the ordinance ("actuarially equivalent") was undefined and ambiguous. MERC found that this unilateral change in the mortality table used to calculate benefits constituted an Unfair Labor Practice under PERA.
The County appealed MERC's decision to the Michigan Court of Appeals, arguing that it had no duty to bargain over which mortality table is used because actuarial assumptions are the sole responsibility of the independent retirement commission established by the ordinance. The Court of Appeals, in a 2-1 decision, rejected that argument, and agreed with MERC that the County "violated [its] duty to bargain when, without bargaining, they changed the method used to calculate joint and survivor pension benefits under the parties' collective bargaining agreement."
Judge Markey dissents, and would hold that, under the County's ordinance, mortality tables and actuarial assumptions are not a mandatory subject of bargaining under PERA but, even if they are, these matters are covered by the collective bargaining agreement already in place.
The County has 42 days from the date of the opinion to seek leave to appeal from the Michigan Supreme Court.
For more information about collective bargaining agreements and PERA, please contact Andria Ditschman at (517) 886-7139 or
; or Michael Woodworth at (517) 886-7119 (