Polites v Flint Public Schools – 3.03

Polites v Flint Public Schools
Digest no. 3.03

Section 27(f)

Cite as: Polites v Flint Pub Schools, 132 Mich App 609 (1984).

Appeal pending: No
Claimant: James R. Polites
Employer: Flint Public Schools
Docket no.: B79 02190 66513
Date of decision: March 5, 1984

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COURT OF APPEALS HOLDING: Claimant contributed less than half the cost of the retirement benefit. The determination of whether claimant’s benefits are to be subject to reduction under Section 27(f) focuses on the amount of claimant’s contribution towards the cost of the benefit not a comparision of what claimant contributed to the employer’s contribution.

FACTS: Claimant was employed by respondent school district as a teacher for approximately 23 years, retiring July 1, 1978. During his employment claimant contributed $14, 615.13 to this retirement fund, while respondent contributed $3,223.80. Contributions to claimant;s retirement fund were also made by the State of Michigan. Claimant’s monthyly retirement benefit consisted of an annuity funded entirely by claimant’s contribution which paid claimant $31.13 monthly and a pension benefit of $533.45 monthly funded entirely by the employer and the State of Michigan.

DECISION: Claimant’s weekly benefit rate was properly subject to adjustment under Section 27(f).

RATIONALE: “… it is clear that, if the employer, has contributed to the retirement plan, unless the employee also contributing to the plan provided more than half of the cost of the benefits, the employee’s unemployment compensation benefits must be reduced. Nothing in the statute suggest that the legislature intended that the employer’s contributions simply be compared to the employee’s in determining if a reduction is proper.”

Digest Author:  Board of Review (original digest here)
Digest Updated: 6/91

Horney v US Post Office – 3.02

Horney v US Post Office
Digest no. 3.02

Section 27(f)

Cite as: Horney v US Post Office, unpublished opinion of the Berrien Circuit Court, issued May 12, 1983 (Docket No. 82-2657-AE-B).

Appeal pending: No
Claimant: Alan A. Horney
Employer: US Post Office
Docket no.: UCF80 16132 75134
Date of decision: May 12, 1983

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CIRCUIT COURT HOLDING: The cost of the benefit cannot be construed to mean the present actuarial value of the benefit. “This Court interprets the statutory use of the word “costs” in its plain and ordinary meaning that is, the amount actually spent for something (perhaps of much greater value)”.

FACTS: Claimant and employer paid matching contributions to the retirement fund totaling $28,848. The ultimate value of the pension (based on an actuarial computation) would be $134,000. There is no showing that other costs, beyond the contributions and the respective interest on said contributions were actually paid into the fund.

DECISION: Claimant’s benefits are not subject to reduction under Section 27(f).

RATIONALE: “That the amount actually contributed by both parties plus interest may not be sufficient to pay the ultimate possible pension benefits that might be received by appellant and that any such contingent balance may have to come from other sources (the amount of which is now underterminate and may be nothing) does not make such contingent balance a “cost of benefits” in determining and reducing the amount of unemployment benefits to which appellant otherwise is entitled.

Digest Author: Board of Review (original digest here)
Digest Updated: 6/91

Zajac v US Post Office – 3.04

Zajac v US Post Office
Digest no. 3.04

Section 27(f)

Cite as: Zajac v US Post Office, unpublished opinion of the Macomb Circuit Court, issued February 9, 1981 (Docket No. 80-2340 AE).

Appeal pending: No
Claimant: John Zajac
Employer: U. S. Post Office
Docket no.: UCFE77 10907 56170
Date of decision: February 9, 1981

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CIRCUIT COURT HOLDING: The “cost of the benefit” is the present actuarial value of the retirement benefit.

FACTS: Claimant worked for the U.S. Postal Service from 1942-1976. While claimant was employed, matching contributions were made by the claimant and the employer to the Federal Retirement Program. Claimant’s total contributions to the fund were $15,939. Claimant receives a gross monthly annuity of $913. As of the date of claimant’s separation, the total present value of the retirement benefit was $93,452.33.

DECISION: Claimant’s weekly benefit rate is subject to adjustment under Section 27(f) despite the fact that claimant and employer made matching contributions.

RATIONALE: Claimant’s contribution is less than 1/2 the present actuarial value of the retirement benefit.

Digest Author: Board of Review (original digest here)
Digest Updated: 6/91