Retired teacher sues state over pension tax

A retired teacher from Troy Public Schools has filed a class-action lawsuit against the State of Michigan for breaking its promise that school and state employees’ pensions wouldn’t be taxed.

Thomas R. Okrie made the irrevocable decision to retire from Troy Public Schools, effective July 1, 2000, and began collecting his pension through the Michigan Public School Employees Retirement System.

According to his lawsuit, filed in July 2013 in the Ingham County Court of Claims, Okrie based part of his decision to retire on the Michigan Office of Retirement Services’ statement that “Pensions paid by MPSERS are exempt from Michigan state income tax and Michigan city tax."

But soon after taking office in 2011, Gov. Rick Snyder and Republicans in the Legislature ushered through the passage of Public Act 38 of 2011, which levied a new state and local taxes on many retirees’ pensions.

Okrie and his attorney, Gary P. Supanich, allege that the pension tax constitutes a breach of contract, as the state “made a promise not to tax pensions that state employees and public school employees relied upon when making irrevocable employment termination and retirement decisions.”

“The State of Michigan broke that promise when it started to tax state pensions,” Supanich wrote on his website.

Up to one-third of the 192,000 retired public school employees and 55,000 state retirees are affected by the pension tax, according to MEA-Retired.

To learn more, visit Supanich’s website at http://www.michigan-appeal-attorney.com/Practice-Areas/OKRIE-et-al-v-State-of-Michigan-et-al.shtml.