Thousands of Detroit district school employees may reap the benefits of a lawsuit over pension funding as soon as March.
School employees who worked for Detroit’s main district between 2010 and 2011 can expect refund checks in their mailboxes soon, district leaders say, but making sure the money ends up in the right place will be difficult.
The reimbursements are the outcome of a controversial move during Gov. Jennifer Granholm’s administration to withhold additional money from employees’ paychecks to pay for retiree health care benefits.
The Michigan Supreme Court upheld a ruling by the state Court of Appeals that the withdrawals were unconstitutional. As a result, the state is giving back $550 million to school employees with interest. The amount employees get depends on what they were paid at the time, either 1.5 or 3 percent of their salary.
While every district in the state is charged with handling the refunds, the Detroit district has a larger burden, tasked with processing 13,416 refunds totaling $28.9 million.
Some of the employees no longer work for the district and do not have an updated address on file, the district said, so employees have been asked to update their information by Feb. 28.
Another challenge: The district is trying to fill five positions in the financial department, the area charged with issuing the checks.
Jeremy Vidito, the district’s chief financial officer, said the state did not allocate extra dollars for additional support staff to help with the task, so the department is working overtime to process the checks.
“It’s prioritizing,” he said. “So there are items that we are going to push back to make sure this happens. It’s also … asking people to do more with less.”
Despite the challenges, the district said it plans to begin mailing checks starting the third week of March.
