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 Article of Interest - Michigan's Courts

Michigan Court Clarifies Principal's True Employer
MIRS, April 4, 2003
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A private educational services company is not a “reporting unit” of the Michigan Public School Employees Retirement System (MPSERS), the Court of Appeals ruled this week. As such, anyone employed by the educational services company can not be penalized as working as a public school employee as it relates to retirement benefits.
 
The situation arose in Bay County, where Robert MANTEI, a 30-year elementary school principal retired from the district after the 1996-97 school year. However, for the 1997-98 school year, he signed an employment contract with Thumb Educational Services, who hired Mantei to work in the same function at the same Bay County elementary school.
 
MPSERS claimed Mantei was still employed by a public “reporting unit” and that he was required to reimburse the Retirement Board for that portion of his pension benefits that exceeded the statutory earnings limitation.
 
The Court of Appeals in Mantei v. MPSERS (Docket No. 228589) stated that “As an employee of Thumb, (Mantei) was not `employed by a reporting unit' of the MPSERS and was not subject to the earnings limitation of the act. Consequently, he was entitled to all of the retirement benefits paid to him during the period in question, without deduction.”

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