Miller Johnson Attorneys Defeat State Rule on School Administrator Pensions at Michigan Supreme Court

On Tuesday, July 30, 2024, the Michigan Supreme Court issued its decision in Batista v. Office of Retirement Services. The case, which was filed in 2019 and went before the State’s highest court twice, involved a “Normal Salary Increase” (NSI) rule implemented by the Office of Retirement Services (ORS) for school administrators and administrative assistants.

The NSI rule limited the amount of compensation that school administrators and administrative assistants could count toward their pension credit calculations. The case, which has been handled primarily by Miller Johnson attorneys Bob Schindler and Adam Walker, was filed in 2019 by seven current or retired school administrators and the Michigan Association of Superintendents and Administrators. The administrators and Association argued that the NSI was unlawful.

The July 30 decision by the Supreme Court confirmed that ORS could not create and implement the NSI. The Court further went on to clarify that school employee pensions should be determined, in large part, based on their “normal salary schedule.” That phrase, which is not defined in the statute, was defined by the Court as: “a (1) written document (2) established by statute or approved by a reporting unit’s governing body [i.e., Board of Education] (3) that indicates the time and sequence of compensation, and (4) conforms to a norm, rule, or principle—i.e., it applies to a generally applicable job classification rather than to a specific employee.”

The Court remanded the case back to the trial court to settle outstanding practical applications of its decision, but the main legal issue has been settled. As Miller Johnson attorney Bob Schindler explained: “We are so pleased that the Court agreed that the ORS cannot invent normal salary schedules that deprive school administrators and administrative assistants of the full pensions they deserve. We are thrilled that those decisions belong once more between employees and local boards of education.”