Title: NANCY KOONTZ V AMERITECH SERVICES
Citation: N/A
Docket Number: 116366
State: Michigan
Issuer: Michigan Supreme Court
Date: June 12, 2002

____________________________________________________________________________________________ 
____________________________________________________________________________________________________________________________ 
_____________________________________ 
 
Michigan Supreme Court
Lansing, Michigan 48909 
C hief Justice 
Justices
Maura D. Corrigan  
Michael F. Cavanagh
Elizabeth A. Weaver 
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman 
Opinion 
FILED JUNE 12, 2002  
NANCY KOONTZ,  
Plaintiff-Appellee,  
v  
No. 116366  
AMERITECH SERVICES, INC.,  
Defendant-Appellant,  
and  
UNEMPLOYMENT AGENCY of the  
MICHIGAN DEPARTMENT OF CONSUMER  
AND INDUSTRY SERVICES, formerly 
MICHIGAN EMPLOYMENT SECURITY  
AGENCY,  
Appellee.  
BEFORE THE ENTIRE BENCH (except MARKMAN, J.).  
CORRIGAN, C.J.  
This case requires that we interpret a statute directing  
coordination of unemployment benefits with pension benefits.  
Plaintiff received a lump-sum pension payment under an  
employer-funded retirement plan.  When plaintiff sought  
unemployment 
compensation, 
the 
Unemployment 
Agency1  
1 The Unemployment Agency was formerly known as the 
Michigan Employment Security Commission.  
 
coordinated her weekly benefits with her prorated weekly  
amount of pension payments (i.e., the amount of pension  
benefits plaintiff would have received weekly had she not  
opted for a lump-sum payment).  The ensuing reduction rendered  
plaintiff ineligible to receive any unemployment benefits.  
The Employment Security Board of Review and the circuit court  
upheld the reduction.  The Court of Appeals reversed and held  
that coordination was not required.  
We hold that the governing statute, MCL 421.27(f)(1),  
mandates coordination of plaintiff’s unemployment benefits  
with her pension benefits.  We therefore reverse the judgment  
of the Court of Appeals and reinstate the decision of the  
Board of Review and the judgment of the circuit court.  
I. Underlying Facts and Procedural History  
Plaintiff began working for Ameritech in its Traverse  
City office in 1965.  Thirty years later, Ameritech closed its  
Traverse City office and offered to continue plaintiff’s  
employment in another office.  She declined, electing instead  
to retire.  Ameritech’s retirement incentive program entitled  
plaintiff to a $1,052.95 monthly pension allowance, which  
Ameritech fully funded.  In lieu of monthly payments, however,  
plaintiff elected to receive her pension in a lump-sum in the  
amount of $185,711.55. Plaintiff also chose to transfer the  
lump-sum directly into her individual retirement account  
(IRA).  
Plaintiff then applied for unemployment compensation.  
Ameritech argued in response to plaintiff’s application that  
MCL 421.27(f) of the Michigan Employment Security Act, MCL  
2  
 
421.1 
et 
seq., 
allowed 
coordination 
of 
plaintiff’s  
unemployment benefits with the amount of pension payments  
plaintiff would have received if she had elected the monthly  
payment option. The Unemployment Agency agreed and directed  
coordination under MCL 421.27(f). This coordination resulted  
in a reduction in plaintiff’s unemployment benefits in the  
amount of $243 weekly, rendering her ineligible to receive any  
unemployment benefits.2
 Plaintiff timely protested this  
determination, 
but 
the 
Unemployment 
Agency 
upheld 
its 
decision  
on redetermination.  
Plaintiff thereafter appealed the redetermination.  A  
referee reversed the decision of the Unemployment Agency on  
the ground that neither MCL 421.27(f)(1) nor (5) required  
coordination 
since 
plaintiff 
had 
transferred 
the 
pension 
funds  
directly into her IRA and thus had not “received” the funds  
within the meaning of the act.  The referee relied on the  
Unemployment Agency’s Revised Benefit Interpretation No.  
20.641, which indicates that an employee who rolls a pension  
amount over into an IRA does not incur immediate income tax  
liability because the Internal Revenue Service does not  
consider the payment “received” for income tax purposes.  
Ameritech 
appealed 
the 
referee’s 
decision 
to 
the 
Michigan  
Employment Security Board of Review, which reinstated the  
Unemployment Agency’s determination in a split decision. The  
Board of Review ruled that the taxability of plaintiff’s  
2 Because plaintiff’s pro-rata retirement benefits would 
have been equal to or greater than her weekly unemployment 
benefits, she was not eligible to receive unemployment 
benefits chargeable to Ameritech. See MCL 421.27(f)(1)(a).  
3  
pension benefit did not affect the operation of MCL 421.27(f)  
and that the lump-sum distribution was a “retirement benefit”  
under the plain language of the act. Accordingly, the board  
concluded 
that 
coordination 
was 
required 
under 
MCL  
421.27(f)(1)(a).  
One member of the Board of Review dissented, finding that  
plaintiff did not receive a retirement benefit because the  
lump-sum distribution had been rolled over into an IRA. The  
dissenting 
member 
relied 
on 
Revised 
Benefit 
Interpretation 
No.  
20.641 and the United States Department of Labor’s (USDOL)  
Unemployment Insurance Program Letter No. 22-97.  The USDOL  
Letter No. 22-97 stated that pension amounts rolled over into  
an IRA within sixty days of receipt are not gross income for  
purposes of federal income taxation and thus are not  
“received” for purposes of 26 USC 3304(a)(15)(A) of the  
Federal Unemployment Tax Act (FUTA), 26 USC 3301 et seq.3  The  
dissenting 
member 
concluded that MCL 421.27(f) did not require  
coordination of plaintiff’s weekly benefit amount.  
The circuit court affirmed the Board of Review’s  
decision.  The Court of Appeals then granted leave to appeal4  
and reversed the circuit court order.  239 Mich App 34; 607  
NW2d 395 (1999). 
It held that another subsection, MCL  
421.27(f)(5), governed and did not require coordination of  
benefits.  Alternatively, the court stated in dictum that even  
3 
 The Unemployment Agency issued Revised Benefit  
Interpretation No. 20.641 on November 29, 1995, in an apparent 
attempt to comply with USDOL Letter No. 22-87.  
4 
 Unpublished order, entered July 7, 1998 (Docket No. 
208176).  
4  
if MCL 421.27(f)(1) applied, coordination was not required  
because 1) plaintiff had not received a “retirement benefit”  
within the meaning of MCL 421.27(f)(4), and 2) the phrase  
“receive or will receive” in MCL 421.27(f)(1) does not include  
the direct rollover of a pension fund to an IRA.  
II. Standard of Review  
This case requires us to ascertain the meaning and proper  
application 
of 
MCL 
421.27.  Issues of statutory interpretation  
are questions of law that we review de novo. Oade v Jackson  
Nat’l Life Ins Co, 465 Mich 244, 250; 632 NW2d 126 (2001);  
Donajkowski v Alpena Power Co, 460 Mich 243, 248; 596 NW2d 574  
(1999).  
III. Relevant Statutes  
MCL 
421.27(f)(1) has existed in essentially the same form  
since 1954 PA 197. It states:  
[N]otwithstanding any inconsistent provisions 
of this act, the weekly benefit rate of each 
individual who is receiving or will receive a  
“retirement 
benefit,” 
as 
defined 
in 
[MCL 
421.27(f)(4)], shall be adjusted as provided in 
subparagraphs (a) . . . . However, an individual's 
extended benefit account and an individual's weekly 
extended benefit rate under [MCL 421.64] shall be 
established without reduction under this subsection  
unless [MCL 421.27(f)(5)] is in effect . . . .  
(a) If and to the extent that unemployment 
benefits payable under this act would be chargeable 
to an employer who has contributed to the financing 
of a retirement plan under which the claimant is 
receiving or will receive a retirement benefit  
yielding a pro rata weekly amount equal to or 
larger than the claimant's weekly benefit rate as 
otherwise established under this act, the claimant 
shall not receive unemployment benefits that would 
be chargeable to the employer under this act.  
MCL 421.27(f)(1) thus requires an offset in unemployment  
compensation for retirement benefits if the employer charged  
5  
with unemployment benefits funded the retirement plan. This  
type of reduction is known as “narrow coordination.”  
Before 1980, federal law did not address coordination of  
unemployment 
and 
retirement benefits.  In March 1980, Congress  
amended 26 USC 3304(a)(15) of the FUTA to require the  
coordination of unemployment benefits with employer-funded  
retirement benefits, regardless of whether the employer who  
had funded the retirement benefits was the same employer whose  
account would be charged for the unemployment benefits.  This  
type of coordination is known as “broad coordination.”  
Section 3304, particularly subsection (a)(15), of the FUTA  
requires the states to conform to federal policy regarding  
coordination of unemployment benefits to insure eligibility  
for federal funds or tax credits.  See Gormley v General  
Motors Corp, 125 Mich App 781, 785-786; 336 NW2d 873 (1983).  
In 
response 
to 
the 
federal amendment, the Michigan Legislature  
promptly adopted broad coordination to the extent required by  
federal law. MCL 421.27(f)(5) states:  
Notwithstanding any other provision of this 
subsection, for any week that begins after March 31, 
1980, and with respect to which an individual is 
receiving a governmental or other pension and 
claiming unemployment compensation, the weekly 
benefit amount payable to the individual for those 
weeks shall be reduced, but not below zero, by the 
entire prorated weekly amount of any governmental or 
other pension, retirement or retired pay, annuity, 
or any other similar payment that is based on any 
previous work of the individual.  This reduction  
shall be made only if it is required as a condition 
for full tax credit against the tax imposed by the 
federal unemployment tax act, chapter 23 of subtitle 
C of the internal revenue code of 1986, 26 USC 3301 
to 3311.  
The federal mandate for broad coordination was short­
lived.  In September 1980, Congress amended 26 USC 3304(a)(15)  
6  
to its present form, which requires only narrow coordination,  
i.e., that coordination specified in MCL 421.27(f)(1).  
Despite the federal amendment, the Michigan Legislature has  
never amended MCL 421.27(f)(5). MCL 421.27 thus retains both  
broad and narrow coordination provisions.  We now address the  
interplay of those provisions.  
IV. Principles of Statutory Interpretation  
When interpreting statutory language, our obligation is  
to ascertain the legislative intent that may reasonably be  
inferred from the words expressed in the statute. Wickens v  
Oakwood Healthcare System, 465 Mich 53, 60; 631 NW2d 686  
(2001). When the Legislature has unambiguously conveyed its  
intent in a statute, the statute speaks for itself, and  
judicial construction is not permitted.  Huggett v Dep’t of  
Natural Resources, 464 Mich 711, 717; 629 NW2d 915 (2001);  
Donajkowski, supra at 248. 
Because the proper role of the  
judiciary is to interpret and not write the law, courts simply  
lack authority to venture beyond the unambiguous text of a  
statute.  
Courts must give effect to every word, phrase, and clause  
in a statute, and must avoid an interpretation that would  
render any part of the statute surplusage or nugatory.  
Wickens, supra at 60. Further, we give undefined statutory  
terms their plain and ordinary meanings. Donajkowski, supra  
at 248-249; Oakland Co Road Comm’rs v Michigan Property &  
Casualty Guaranty Ass’n, 456 Mich 590, 604; 575 NW2d 751  
(1998).  In those situations, we may consult dictionary  
definitions. Id.  
7  
 
 
 
 
 
 
 
 
V. Analysis  
A. Interpretation of MCL 421.27(f)  
The Court of Appeals determined that MCL 421.27(f)(5)  
controlled over MCL 421.27(f)(1):  
We conclude that subdivision 27(f)(5) is  
controlling with regard to the coordination of  
plaintiff’s retirement benefits.  Its purpose was to 
conform with the federal government’s goal of 
maintaining certain uniformity among the state 
programs 
regarding 
the 
coordination 
requirements 
for 
unemployment compensation, which purpose would be 
defeated were Michigan to default to its own  
interpretations for coordination under its previous 
statutory provisions and, in this case, circumvent 
the clear result under subdivision 27(f)(5) that 
coordination 
of 
plaintiff’s 
benefits 
is 
not  
required.  
Moreover, 
the 
express 
statutory 
language 
mandates a conclusion that subdivision 27(f)(5) 
controls over subdivision 27(f)(1).  Subdivision  
f(5) 
was 
enacted 
after 
f(1) 
and 
provides: 
“Notwithstanding any other provision of this  
subsection . . . .” 
[Emphasis in original.]  To  
apply 
subdivision 
27(f)(1) 
independently 
of  
subdivision 
27(f)(5) 
and 
deny 
plaintiff 
unemployment 
benefits is inconsistent with the result under  
federal law.  Such an interpretation also creates an 
inconsistency within the statute, contrary to the 
rules of statutory construction.  In construing 
statutes, seeming inconsistencies in the various  
provisions should be reconciled if possible. 
[Citation omitted.]  
Accordingly, the Court of Appeals held that MCL 421.27(f)(5)  
exempted plaintiff’s benefits from coordination.  
The Court of Appeals failed to give effect to every word  
and phrase of MCL 421.27(f).  While the court acknowledged the  
phrase, 
“Notwithstanding 
any 
other 
provision 
of 
this  
subsection” in MCL 421.27(f)(5), it failed to give effect to  
similar 
language 
in 
MCL 
421.27(f)(1), 
stating,  
“notwithstanding 
any inconsistent provisions of this act.”  In  
addition, in finding that MCL 421.27(f)(5) controls over MCL  
8  
 
421.27(f)(1), the Court rendered nugatory MCL 421.27(f)(1),  
contrary to established rules of interpretation.  
We believe that the language of MCL 421.27(f) is clear  
and unambiguous and must therefore be enforced as written.  
Huggett, supra at 717; Donajkowski, supra at 248. 
MCL  
421.27(f)(1) provides, in pertinent part:  
[N]otwithstanding any inconsistent provisions 
of this act, the weekly benefit rate of each 
individual who is receiving or will receive a  
“retirement 
benefit,” 
as 
defined 
in 
[MCL 
421.27(f)(4)], shall be adjusted as provided in 
subparagraph (a) . . . .  
(a) If and to the extent that unemployment 
benefits payable under this act would be chargeable 
to an employer who has contributed to the financing 
of a retirement plan under which the claimant is 
receiving or will receive a retirement benefit  
yielding a pro rata weekly amount equal to or 
larger than the claimant's weekly benefit rate as 
otherwise established under this act, the claimant 
shall not receive unemployment benefits that would 
be chargeable to the employer under this act. 
[Emphasis added.]  
This 
text 
requires 
coordination 
where 
the 
claimant’s  
unemployment benefits are chargeable to the employer who  
contributed to the financing of the claimant’s retirement  
benefits.
 
Thus, 
“narrow 
coordination” 
is 
required  
“notwithstanding any inconsistent provisions of this act  
. . . .”  
MCL 421.27(f)(5), on the other hand, requires “broad  
coordination” where necessary to conform to federal law:  
Notwithstanding any other provision of this 
subsection, for any week that begins after March 31, 
1980, and with respect to which an individual is 
receiving a governmental or other pension and  
claiming unemployment compensation, the weekly 
benefit amount payable to the individual for those 
weeks shall be reduced, but not below zero, by the 
entire prorated weekly amount of any governmental or 
other pension, retirement or retired pay, annuity,  
9  
 
or any other similar payment that is based on any 
previous work of the individual.  This reduction  
shall be made only if it is required as a condition 
for full tax credit against the tax imposed by the 
federal unemployment tax act, chapter 23 of subtitle 
C of the internal revenue code of 1986, 26 USC 3301  
to 3311. [Emphasis added.]  
This provision broadens the coordination required in MCL  
421.27(f)(1) by compelling a reduction not only with regard to  
pension funds that the chargeable employer contributes, but  
also with regard to pension funds “based on any previous  
work,” 
regardless 
of 
whether 
the 
chargeable 
employer  
contributed the funds.  MCL 421.27(f)(5) requires such “broad  
coordination” only when necessary to conform to federal law.  
Thus, contrary to the Court of Appeals analysis, MCL  
421.27(f)(1) and (5) are not inconsistent, but can be  
harmonized.
 
While 
MCL 
421.27(f)(1) 
always 
requires  
coordination of pension benefits that the chargeable employer  
contributed, 
MCL 
421.27(f)(5) 
may 
also 
require 
coordination 
of  
pension benefits on the basis of the claimant’s previous work  
if such broad coordination is necessary to conform to federal  
law.  
Our 
application of the plain language of these provisions  
does not render MCL 421.27(f)(5) nugatory.  If Congress again  
chooses to require broad coordination, the additional  
reduction 
prescribed 
in 
subsection 
27(f)(5) 
will 
be 
triggered.  
That federal law does not presently require the reduction does  
not render MCL 421.27(f)(5) nugatory and does not compel the  
Michigan Legislature to amend the statute.  
B. The Meaning of “Liquidation”  
10  
 
 
 
  
Because MCL 421.27(f)(5) does not apply here,5 the  
question 
remains 
whether 
MCL 
421.27(f)(1) 
required  
coordination of plaintiff’s benefits.  The Court of Appeals  
stated in dictum that even if MCL 421.27(f)(1) governed, it  
did not require an offset because plaintiff did not receive a  
“retirement 
benefit” 
within 
the 
meaning 
of 
MCL  
421.27(f)(4)(a). That subdivision provides:  
(4)(a) As used in this subdivision, “retirement 
benefit” mean a benefit, annuity, or pension of any  
type . . . that is:  
(i) Provided as an incident of employment under  
an 
established 
retirement 
plan, 
policy, 
or  
agreement, including federal social security if 
subdivision (5) is in effect.  
(ii) Payable to an individual because the  
individual has qualified on the basis of attained 
age, length of service, or disability, whether or 
not the individual retired or was retired from  
employment. 
Amounts paid to individuals in the  
course of liquidation of a private pension or 
retirement fund because of termination of the  
business or of a plant or department of the business 
of the employer involved shall not be considered to 
be retirement benefits. [Emphasis added.]  
The Court of Appeals determined that plaintiff’s pension was  
not a retirement benefit within the meaning of MCL  
421.27(f)(4)(a) 
because 
the 
fund 
was 
liquidated 
upon  
plaintiff’s termination when Ameritech closed its Traverse  
City office. This factual conclusion was erroneous.  
Although the Ameritech Traverse City office was closed,  
5 Even if MCL 421.27(f)(5) applied, it would not change 
the result.  Plaintiff did not receive extended benefits, but, 
rather, 
Ameritech 
contributed to all the pension benefits paid 
to plaintiff.  Plaintiff did not receive benefits from any 
employer 
other 
than 
Ameritech, the chargeable employer.  Thus, 
even if federal law mandated broad coordination under MCL  
421.27(f)(5), the facts of this case implicated only the 
narrow coordination already required by MCL 421.27(f)(1).  
11  
  
 
 
the record does not reflect that the pension fund was  
liquidated. Random House Webster’s College Dictionary (2000)  
defines “liquidate” as “to settle or pay (a debt),” “to reduce  
(accounts) to order,” “to dissolve (a business or estate) by  
apportioning the assets to offset the liabilities,” “to  
convert (inventory, securities, or other assets) into cash,”  
“to get rid of, esp. by killing,” “to break up or do away  
with,” and “to liquidate debts or accounts.”  The more  
pertinent of these definitions contemplate the elimination of  
an entire entity or the abolition of all assets or accounts  
within an entity.  As such, liquidation would involve the  
Ameritech pension fund distributing all its assets.  The  
distribution of a single employee’s vested interest is not a  
liquidation of the pension fund.  In addition, plaintiff could  
have elected to accept her pension benefits as a monthly  
annuity, 
which 
clearly refutes the Court of Appeals conclusion  
that the fund had been liquidated.  
Our dissenting colleague maintains that we misconstrue  
the meaning of MCL 421.27(f)(4)(a) by failing to consider the  
entire sentence in which “liquidation” appears.  She attempts  
to generate an ambiguity in the phrase “liquidation of a  
private pension or retirement fund” by asserting that the  
phrase could refer either to an individual’s personal account  
or fund or to the collective pension fund. 
We reject the  
dissent’s view.  
The meaning of the phrase in MCL 421.27(f)(4)(a)(ii)  
hinges on the word “liquidation.”  As discussed, the plain  
meaning of that term requires distribution of all assets held  
12  
  
in the pension fund for all employees. The dissent contends  
that the term “liquidate” has many definitions, some of which  
may be interpreted to apply to a sole pension account, such as  
that belonging to plaintiff.  A word is not rendered  
ambiguous, however, merely because a dictionary defines it in  
a variety of ways. Upjohn Co v New Hampshire Ins Co, 438 Mich  
197, 208-209, n 8; 476 NW2d 392 (1991).  Rather, the doctrine  
of noscitur a sociis requires that the term “liquidation” be  
viewed in light of the words surrounding it.  Herald Co v Bay  
City, 463 Mich 111, 130, n 10; 614 NW2d 873 (2000).  
“Contextual 
understanding 
of 
statutes 
is 
generally 
grounded 
in  
the doctrine of noscitur a sociis: ‘[i]t is known from its  
associates,’ see Black’s Law Dictionary (6th ed), p 1060.  
This doctrine stands for the principle that a word or phrase  
is given meaning by its context or setting.”  Brown v Genesee  
Co Bd of Comm’rs (After Remand), 464 Mich 430, 437; 628 NW2d  
471 (2001), quoting Tyler v Livonia Schs, 459 Mich 382, 390­
391; 590 NW2d 560 (1999).  
In the context of the statute, the term “liquidation”  
pertains to multiple accounts rather than to an individual  
account.  The statute exempts from the category of “retirement  
benefits” those amounts “paid to individuals in the course of  
liquidation of a private pension or retirement fund.”  
Therefore, the text contemplates that liquidation pertains to  
multiple accounts and not merely the single account of an  
individual 
pensioner.  In addition, the liquidation must occur  
because of “termination of the business or of a plant or  
department of the business.”  Such a termination would involve  
13  
 
all employees within the business, plant, or department, and  
not merely a single employee. Therefore, in accordance with  
the doctrine of noscitur a sociis, the phrase “liquidation of  
a private pension or retirement fund” is not ambiguous; the  
language clearly refers to the distribution of all assets  
within the fund. Moreover, the dissent does not explain how  
the fund was liquidated where, as discussed above, plaintiff  
could have chosen to collect her pension benefits as a monthly  
annuity.  
Further, the dissent asserts that MCL 421.27(f)(4)(a) is  
a remedial statute that we should construe liberally in favor  
of plaintiff.  We do not apply preferential rules of statutory  
interpretation, 
however, 
without 
first 
discovering 
an  
ambiguity and attempting to discern the legislative intent  
underlying the ambiguous words.  Crowe v Detroit, 465 Mich 1,  
13; 631 NW2d 293 (2001). Only if that inquiry is fruitless,  
or produces no clear demonstration of intent, do we resort to  
a preferential or “dice-loading” rule.6  Because no ambiguity  
exists, the remedial rule of preference does not apply. Id.  
The dissent also asserts that our interpretation of the  
statute produces “unconscionable results.”  It is not the role  
of the judiciary, however, to second-guess the wisdom of a  
legislative policy choice. Our constitutional obligation is  
to interpret, not to rewrite, the law. 
The Legislature  
apparently determined that the same result should obtain  
regardless of whether an employee opts for a monthly annuity  
6 
 See also Scalia, A Matter of Interpretation: Federal 
Courts and the Law (Princeton, NJ, 1997) pp 27-29.  
14  
  
or for a lump-sum payment. Here, if plaintiff had elected a  
monthly annuity in lieu of the lump-sum payment, no question  
would exist that she would have been ineligible to receive  
unemployment benefits.  
Moreover, plaintiff chose to accept her pension benefits  
instead of relocating to another Ameritech office. Ameritech  
had offered plaintiff the opportunity to continue her  
employment in another location, but she declined to do so.  
The 
payout 
followed 
plaintiff’s decision to retire rather than  
relocate. While the dissent contends that plaintiff had no  
choice but to accept her pension benefits, the record does not  
support this assertion.  Accordingly, the condition set forth  
in MCL 421.27(f)(4)(ii), providing an exception to the term  
“retirement benefit,” does not apply in this case.  
Thus, whether Ameritech’s payment to plaintiff was a  
“retirement benefit” depends on whether it was “a benefit,  
annuity, or pension of any type” payable to her “because [she]  
has qualified on the basis of attained age [or] length of  
service . . . .”  In defining a “retirement benefit,” the  
Legislature has used words of common and ordinary meaning, and  
we apply them accordingly.  Donajkowski, supra at 248-249;  
Oakland Co Rd Comm’rs, supra at 604. It is undisputed that  
plaintiff received a pension benefit on the basis of her age  
and years of service.  Thus, she received a “retirement  
benefit” as contemplated in MCL 421.27(f)(4)(a).  
C. The Meaning of “Receive or Will Receive”  
The Court of Appeals also stated, in dictum, that even if  
plaintiff’s distribution were a retirement benefit, it was  
15  
 
 
exempt from coordination because “the Legislature did not  
intend the terms ‘receive or will receive’ under § 27(f)(1) to  
include the direct rollover of a pension fund to an IRA  
. . . .” The Court stated:  
This construction of the statute is the most  
reasonable 
and 
comports 
with 
the 
benefit  
interpretations of both the UA and the USDOL. MESC  
Revised Benefit Interpretation No. 20.641 (November 
29, 1995); USDOL Unemployment Insurance Program 
Letter No. 22-87, Change 1 (June 19, 1995).  In  
reaching our conclusion, we are mindful that the 
role of the judiciary is not to engage in judicial 
legislation, but rather to determine the way chosen 
by the Legislature. [Citation omitted.]  We decline  
to interpret the statute to incorporate any change 
that overrides requirements clearly adopted by the 
Legislature. [239 Mich App 47.]  
While this issue is one of first impression in the  
context 
of 
unemployment compensation, it has been addressed in  
the somewhat analogous context of worker’s compensation.  
White v McLouth Steel Products, decided sub nom Corbett v  
Plymouth Twp, 453 Mich 522; 556 NW2d 478 (1996).7  In White,  
this Court construed MCL 418.354(1)(d), of the Worker’s  
Disability Compensation Act, MCL 418.101 et seq., which  
directs that worker’s compensation benefits be coordinated  
with “[t]he after-tax amount of the pension or retirement  
payments received or being received . . . .”  The employee in  
White rolled his lump-sum pension distribution into an IRA.  
The question was whether the nontaxable nature of the rollover  
transfer precluded coordination of the retirement payments  
with the worker’s compensation benefits.  This Court ruled in  
7 See, generally, Drouillard v Stroh Brewery Co, 449 Mich 
293, 304-305; 536 NW2d 530 (1995) (holding that the employer 
could 
coordinate 
a 
lump-sum 
pension 
distribution 
with 
worker’s 
compensation benefits where the employee had been “forced” to 
accept the pension distribution).  
16  
 
 
favor of the employee.  It rejected as “literalism” the  
employer’s contention that the employee “received” the  
transferred amount. 
This Court also stated that its  
interpretation was consistent with the language of MCL  
418.354(1)(d), limiting coordination to the after-tax amount  
of the pension:  
By reason of the tax-free aspect of a rollover 
into an IRA, there is no taxable event and, hence, 
no tax or “after-tax amount” that is “received or  
being received.” [Id. at 547.]  
Three justices dissented in White. They opined:  
The [majority] opinion dismisses the statute’s 
language by labeling as “literalism” defendant 
McLouth Steel Products’ argument that under the 
statute White has received his pension payment. 
Ante at 544. 
[T]he better phrase would be plain 
meaning.  Subsection 354(1)(d) provides that weekly 
worker’s compensation benefits may be reduced by 
the “after-tax amount of the pension or retirement 
payments received” by the employee and does not 
condition the coordination of pension benefits on 
whether the employee actually begins to use these 
funds or invests them in a plan in which he will 
only later receive payments. . . .  
The 
majority 
attempts 
to 
justify 
its  
interpretation . . . by noting the statute’s use of 
the “after-tax amount,” but fails to note that [MCL  
418.354(13)] defines “after-tax amount” as the  
amount remaining after subtracting the estimated  
tax the employee would pay on the benefit, not the 
actual tax the employee incurred . . . .  [Id. at  
562-563 (emphasis in original).[8]  
MCL 421.27(f)(1) is the unemployment compensation  
counterpart of MCL 418.354(1)(d), but it lacks the “after-tax  
amount” language on which the White majority relied in part.  
The question here is whether plaintiff “received” the  
8 
 More precisely, MCL 418.354(13) defines “after-tax 
amount” as the gross amount remaining after subtracting the 
amount “which would have been paid, if any, under . . . state 
income tax and federal income tax . . . .” [Emphasis added.]  
17  
 
transferred 
amounts. 
Random 
House 
Webster’s 
College  
Dictionary (2000) defines “receive” as “to take into one’s  
possession,” “to have (something) bestowed, conferred, etc.,”  
“to hold, bear, or contain,” and “to take, get, accept, or  
meet with something.”  In light of these definitions, we  
conclude that plaintiff received her retirement benefits  
within the meaning of MCL 421.27(f)(1), notwithstanding the  
fact that Ameritech transferred the funds directly into her  
IRA.  We disagree with our dissenting colleague that plaintiff  
did not take the pension funds into her possession within the  
meaning of the dictionary definition of “receive.”  The funds  
were transferred at plaintiff’s direction.  She is able to  
withdraw the funds at any time and use them as she sees fit.  
Ameritech clearly conferred the funds upon plaintiff, and  
plaintiff accepted those funds by directing them into an  
account of her choice.  Accordingly, it is inescapable that  
plaintiff received the funds.  Because the dissenting opinion  
in White is better reasoned, following that approach, we  
conclude that plaintiff “received” the distribution at issue  
within the meaning of MCL 421.27(f)(1).9  
9 We overrule White to the extent that it is inconsistent  
with our present holding. The White majority also relied in 
part on the statutory language “after-tax amount” in MCL 
418.354(1)(d) in support of its decision.  We do not decide  
whether that aspect of White was decided correctly because it 
is irrelevant to our determination in this case.  
Our 
concurring 
colleague 
asserts 
that 
overruling 
White 
in  
part is unnecessary because, unlike the statute in White, the 
statute before us does not contain the “after-tax amount”  
language.  He fails to acknowledge, however, that in addition 
to the “after-tax amount” language, the White majority relied 
in part on an erroneous definition of “receive,” conditioned 
on the taxable nature of the funds in question. 
The  
concurring 
opinion, 
therefore, 
overlooks 
part 
of 
the 
reasoning  
18  
 
 
  
Like, the 
Court 
of Appeals, the dissent would erroneously  
elevate a construction from an extratextual source above the  
unambiguous language of the statute itself.  As we have stated  
repeatedly, courts may not look beyond the clear text of a  
statute to discover an unexpressed legislative intent.  Sun  
Valley Foods Co v Ward, 460 Mich 230, 236; 596 NW2d 119  
(1999). Although this Court generally accords due deference  
to an administrative agency charged with executing a  
particular statute, we grant no deference here because the  
plain meaning of the statute controls. 
“An agency  
interpretation cannot overcome the plain meaning of a  
statute.” Consumers Power Co v Public Service Comm, 460 Mich  
148, 157, n 8; 596 NW2d 126 (1999).  The plain and ordinary  
meaning of “receive” provides no basis to differentiate  
between funds that are taxable and those that are not.  
Therefore, MCL 421.27(f)(1) requires coordination whether or  
not the funds are subject to taxation when plaintiff received  
them by directing their deposit into her IRA account.  
VI. Conclusion  
We conclude that MCL 421.27(f)(1) required coordination  
of plaintiff’s unemployment benefits with her pension  
benefits.  Plaintiff received a “retirement benefit” within  
the meaning of MCL 421.27(f)(1).  That subsection required  
coordination, whether or not the funds were subject to  
taxation at the time of their receipt.  Accordingly, we  
reverse the judgment of the Court of Appeals and reinstate the  
decision of the Board of Review and the judgment of the  
upon which the majority in White based its decision.  
19  
 
 
circuit court.  
WEAVER, 
TAYLOR, and YOUNG, 
JJ., concurred with CORRIGAN, C.J.  
20  
________________________________ 
 
 
v 
S T A T E O F M I C H I G A N  
SUPREME COURT  
NANCY KOONTZ,  
Plaintiff-Appellee,  
No. 116366  
AMERITECH SERVICES, INC.,  
Defendant-Appellant,  
and  
UNEMPLOYMENT AGENCY of the  
MICHIGAN DEPARTMENT OF CONSUMER  
AND INDUSTRY SERVICES, formerly 
MICHIGAN EMPLOYMENT SECURITY  
AGENCY,  
Appellee.  
CAVANAGH, J. (concurring).  
I concur with the result in this case that MCL  
421.27(f)(1) 
required 
coordination 
of 
plaintiff’s 
unemployment  
benefits with her pension benefits.  However, I write  
separately because in reaching this result, it is not  
necessary for the majority to adopt the dissent’s approach  
from White v McLouth Steel Products, decided sub nom Corbett  
v Plymouth Twp, 453 Mich 522; 556 NW2d 478 (1996), and to  
overrule White to the extent that it is inconsistent with  
today’s holding. 
In White, this Court construed MCL  
418.354(1)(d) of the Worker’s Disability Compensation Act  
 
 
 
 
(WDCA), which provided that worker’s compensation benefits be  
coordinated with “[t]he after-tax amount of the pension or  
retirement payments received or being received . . . .”  
(Emphasis added.) The White Court stated:  
The construction that we adopt is consistent 
with the language of the statute, which provides 
for an offset “of the after-tax amount of the  
pension or retirement payments received or being 
received by the employee . . . .” (Emphasis added.) 
By reason of the tax-free aspect of a rollover into 
an IRA, there is no taxable event and, hence, no 
tax or “after-tax amount” that is “received or  
being received.” [White, supra at 547.]  
The instant case involves an unemployment benefits  
statute that is similar to the worker’s compensation statute  
in White, but does not contain the “after-tax” language.  
Although the remaining language in these statutes is similar,  
it is not identical.  The two statutes are clearly different;  
they contain materially different language and arguably serve  
different purposes.  
Because of the differences between these statutes, the  
majority does not need to address White. 
The White Court  
clearly stated that its holding was based on the “after-tax”  
language in the WDCA statute it was construing.  
2  
___________________________________ 
 
 
 
v 
S T A T E O F M I C H I G A N  
SUPREME COURT  
NANCY KOONTZ,  
Plaintiff-Appellee,  
No. 116366  
AMERITECH SERVICES, INC.,  
Defendant-Appellant,  
and  
UNEMPLOYMENT AGENCY of the  
MICHIGAN DEPARTMENT OF CONSUMER  
AND INDUSTRY SERVICES, formerly 
MICHIGAN EMPLOYMENT SECURITY  
AGENCY,  
Appellee.  
KELLY, J. (dissenting).  
I respectfully disagree with the majority's conclusion  
that plaintiff's unemployment compensation benefits should be  
eliminated because she has received retirement benefits as  
defined by the Michigan Employment Security Act (MESA). MCL  
421.1 et seq. 
The majority reads the relevant statutory  
language as unambiguous, despite strong indications to the  
contrary. It fails to consider the entirety of the sentence  
in which the word "liquidation" appears and disregards  
interpretive letters that define "receive."  In so doing, the  
  
majority misconstrues the meaning of MCL 421.27(f)(4)(a).  
The 
Court 
of 
Appeals 
advanced 
the 
correct 
interpretation.  
I would affirm its holding that plaintiff did not receive a  
"retirement benefit" within the meaning of the act and that  
her 
unemployment 
compensation 
benefits 
should 
not be  
eliminated as a consequence.  
I. STATUTORY CONSTRUCTION  
When construing a statute, our primary goal is to  
ascertain and give effect to the intent of the Legislature in  
writing it.  Turner v Auto Club Ins Ass'n, 448 Mich 22, 27;  
528 NW2d 681 (1995).  While judicial interpretation usually is  
not permitted where statutory language is clear, a literal  
construction must yield when it produces absurd and unjust  
results.  See Salas v Clements, 399 Mich 103, 109; 247 NW2d  
889 (1976).  Judicial interpretation is also appropriate when  
reasonable minds can differ regarding the meaning of the  
language. Adrian Sch Dist v Michigan Pub Sch Emp Retirement  
System, 458 Mich 326, 332; 582 NW2d 767 (1998). If judicial  
interpretation is necessary, legislative intent is determined  
by giving the statutory language a construction that is both  
reasonable and that best accomplishes the purpose of the  
statute. Frankenmuth Mut Ins Co v Marlette Homes, Inc, 456  
Mich 511, 515; 573 NW2d 611 (1998).  
A. THE TERM "LIQUIDATION"  
The 
MESA 
allows 
unemployment benefits payable under it to  
be reduced or eliminated where a claimant is receiving a  
"retirement benefit."  MCL 421.27(f)(1). It defines that term  
as "a benefit, annuity, or pension of any type . . . payable  
2  
 
 
  
[when] . . . the individual was retired from employment."  MCL  
421.27(f)(4)(a)(ii).  But the act expressly excludes as a  
retirement benefit any amounts paid to individuals "in the  
course of liquidation of a private pension or retirement fund  
because of termination of the business or of a plant or  
department of the business of the employer involved . . . ."  
1 
Id. 
In this case, plaintiff lost her job with defendant  
because defendant closed the facility where she worked. The  
question is whether her retirement funds fall within the  
statutory definition of "retirement benefit" or within the  
exception.  
The expression "liquidation of a private pension or  
retirement 
fund" 
in 
§ 
27(f)(4)(a)(ii) 
could 
mean 
a  
distribution of all pension monies that an employer holds for  
1  MCL 421.27(f)(4)(a) provides:  
As used in this subdivision, "retirement  
benefit" means a benefit, annuity, or pension of 
any type or that part thereof that is described in 
subparagraph (b) that is:  
(i) Provided as an incident of employment 
under an established retirement plan, policy, or 
agreement, including federal social security if 
subdivision (5) is in effect.  
(ii) Payable to an individual because the 
individual has qualified on the basis of attained 
age, length of service, or disability, whether or 
not the individual retired or was retired from  
employment. Amounts paid to individuals in the 
course of liquidation of a private pension or 
retirement fund because of termination of the  
business or of a plant or department of the 
business of the employer involved shall not be 
considered to be retirement benefits.  
3  
 
 
 
all its employees. Defendant here maintains that it did not  
liquidate its entire pension fund monies when it closed the  
facility where plaintiff worked and that the fund continues to  
exist.
 Under this interpretation and in this factual  
situation, plaintiff's pension distribution would constitute  
retirement benefits and she could not be paid unemployment  
benefits.  
On the other hand, the clause "liquidation of a private  
pension or retirement fund" could mean a distribution of all  
pension monies that an employer holds for one or more but not  
all of its employees.2  As noted by the majority, the word  
"liquidate" has many definitions, including "to settle or pay  
(a debt)" and "to convert (inventory, securities, or other  
assets) into cash."3  Applying that definition here, defendant  
"liquidated" plaintiff's retirement fund when it distributed  
the entire contents and closed the account, settling its debt  
to plaintiff and converting her pension into cash.  Hence, the  
distribution would not constitute retirement benefits and  
plaintiff could draw unemployment benefits.  
The majority offers no persuasive reasoning to support  
its conclusion that the "more pertinent" definition of  
"liquidate" is that contemplating the elimination of all  
corporate pension assets.  The mere fact that it prefers this  
2  It is not clear from the record whether defendant  
distributed retirement funds to all employees in the facility 
that it closed.  It is known that five other employees were 
affected in the same way as plaintiff.  
3  See Random House Webster's College Dictionary (2001).  
4  
 
to a definition more favorable to plaintiff has no bearing on  
what the Legislature intended "liquidate" to mean.  The varied  
definitions of the word leave room for reasonable minds to  
differ.
 It is inescapable that the statutory language is  
ambiguous.  
The majority's interpretation, that "liquidation" means  
a distribution of all pension monies held for all its  
employees, produces unconscionable results. For example, in  
this case, Ameritech would never "liquidate" all its pension  
fund monies by shutting down one or some of its facilities.  
Hence, 
no 
employee 
in plaintiff's situation could ever collect  
unemployment benefits.  As an extreme example, if defendant  
discharged all its employees, it could distribute all but one  
dollar of the funds in the pension fund.  Then, the fund would  
not have been liquidated under the majority's reading because  
all the assets would not have been distributed.  In so doing,  
defendant could reduce or eliminate all its employees'  
unemployment benefits. 
The Legislature could not have  
intended the result in either example.  
The practical implications of the majority's reading of  
§ 
27(f)(4)(a)(ii) 
are 
enormously 
detrimental 
to 
employees 
like  
plaintiff.  During plaintiff's hearing before the Michigan  
Employment Security Board of Review, defendant's human  
resources manager testified that there is a single common  
trust fund for pension monies to which both defendant and  
Michigan Bell contribute.
 Absent closure of the entire  
corporation and all its pension funds, whenever defendant  
shuts down one facility, it will always escape paying  
5  
 
 
 
unemployment benefits to the employees who worked there.  
The majority distorts the facts of this case by  
portraying plaintiff's acceptance of her pension funds as a  
choice.  Defendant offered plaintiff two other jobs in its  
corporation.  However, both were located approximately two  
hours from her residence.  When plaintiff declined them  
because 
the 
commute 
would 
be 
unreasonable, 
defendant  
distributed her retirement funds.  She did not have the option  
to leave them in defendant's trust fund. She was obliged to  
have them rolled into an IRA or paid to her in a monthly  
annuity.4  It is in light of these facts that defendant  
believes the funds were not liquidated within the meaning of  
MCL 421.27(f)(4)(a)(ii).  
My construction of § 27(f)(4)(a)(ii) is in keeping with  
the fact that the MESA is a remedial statute.  As such, by  
principle, 
it 
should 
be liberally construed to afford benefits  
to a displaced employee.  Empire Iron Mining Partnership v  
Orhanen, 455 Mich 410, 415-416; 565 NW2d 844 (1997). 
My  
construction also furthers the purpose of the act, which is  
"to lighten the burden of economic insecurity on those who  
become unemployed through no fault of their own."  Id. at 417.  
B. THE PHRASE "IS RECEIVING OR WILL RECEIVE"  
I also disagree with the majority's rejection of the  
Court of Appeals finding that, within the meaning of MCL  
4  Defendant did not at any point during the trial and 
appellate proceeding contest this. Accordingly, there is no 
reason for this Court to question the accuracy of plaintiff's 
assertion that she was required to see her retirement funds 
distributed. The record supports the claim.  
6  
 
 
 
421.27(f)(1), the funds were not "received." Once again, the  
majority brushes aside reasonable interpretations other than  
its own and characterizes a word as unambiguous.  
The facts of this case show that plaintiff did not take  
the pension funds into her possession within the dictionary  
definition of "receive." Instead, defendant transferred the  
funds directly into an individual retirement account in her  
name.  
The Court of Appeals decision interpreted "receive" by  
relying in part on interpretive letters issued by the United  
States Department of Labor (USDOL)5 and the Michigan  
Employment Security Commission.6  Both conclude that, when an  
employer transfers an employee's retirement funds into an  
individual retirement account, the employee does not receive  
them for purposes of the relevant unemployment compensation  
laws.  
The majority ignores these letters, choosing instead to  
construct a definition of "receive" on the basis of a  
dissenting opinion7 and dictionary definitions. However, it  
is a long-established principle of law that "'[t]he  
5 USDOL Unemployment Insurance Program Letter No. 22-87, 
Change 1 (June 19, 1995).  
6 Michigan 
Employment 
Security 
Commission 
Revised 
Benefit 
Interpretation No. 20.641 (November 29, 1995).  
7  The majority adopts the reasoning from the dissenting 
opinion in White v McLouth Steel Products, decided sub nom 
Corbett v Plymouth Twp, 453 Mich 522; 556 NW2d 478 (1996). In  
so doing, it reverses that part of White that is inconsistent  
with its holding.  There is no reason to reach White. That  
case is easily distinguishable on the basis of the statutory 
provisions involved.  
7  
 
  
construction given to a statute by those charged with the duty  
of executing it is always entitled to the most respectful  
consideration and ought not to be overruled without cogent  
reasons.'" 
Oakland Schs Bd of Ed v Superintendent of Pub  
Inst, 401 Mich 37, 41; 257 NW2d 73 (1977), quoting United  
States v Moore, 95 US (5 Otto) 760; 24 L Ed 588 (1877).  
The majority offers no cogent reason to deviate from the  
administrative agencies' interpretations, which provide a  
reasonable construction of the statutory language consistent  
with the purpose and the policy of the MESA.  This Court  
should accord that interpretation due deference and hold that  
plaintiff did not receive a retirement benefit within the  
meaning of § 27(f) of the MESA.  
II. PUBLIC POLICY  
The 
controversy 
here 
regarding 
the 
correct 
interpretation  
of the statutory definition of "retirement benefit" is best  
resolved by considering the public policy expressly declared  
in the MESA. It provides:  
Economic insecurity due to unemployment is a 
serious menace to the health, morals, and welfare 
of the people of this state. 
Involuntary 
unemployment is a subject of general interest and 
concern which requires action by the legislature to 
prevent its spread and to lighten its burden which 
so often falls with crushing force upon the  
unemployed worker and his family, to the detriment 
of the welfare of the people of this state.  Social  
security requires protection against this hazard of 
our economic life. Employers should be encouraged 
to provide stable employment. 
The systematic 
accumulation of funds during periods of employment 
to provide benefits for periods of unemployment by 
the setting aside of unemployment reserves to be 
used for the benefit of persons unemployed through 
no fault of their own, thus maintaining purchasing 
power and limiting the serious social consequences 
of relief assistance, is for the public good, and  
8  
the general welfare of the people of this state. 
[MCL 421.2.]  
The majority disregards this part of the act despite the  
fact that the Legislature's declaration of public policy  
contained there is of paramount importance.  Plaintiff lost  
her position with defendant as a result of defendant's  
decision to close the facility where she worked.  She had  
vested 
pension 
benefits 
that 
defendant 
distributed 
and 
treated  
as hers prematurely.  
Had defendant offered plaintiff reasonable employment,  
plaintiff could have left her pension benefits undisturbed.  
Instead, it terminated plaintiff's employment and prevented  
her from drawing unemployment benefits.  It required her to  
choose 
between 
paying her current living expenses or preseving  
her retirement monies, contrary to the explicit public policy  
of 
the 
state. 
 
Defendant's scheme only exacerbated plaintiff's  
economic insecurity.  
III. CONCLUSION  
Ambiguity 
exists 
in 
the 
statutory 
language 
of  
§ 27(f)(4)(a) of the MESA that defines a "retirement benefit"  
as not including an amount paid in the course of liquidation  
of a private pension or retirement fund.  The Court should  
ascertain 
the 
Legislature's intent in using that expression by  
referring to the stated purpose of the MESA and the underlying  
public policy.  With these in mind, the only reasonable  
construction is one that defines a pension distribution made  
under the circumstances of this case as not constituting a  
"retirement benefit."  
9  
The meaning of "receive" is also subject to differing  
reasonable interpretations.  In construing it, this Court  
should defer to the meaning that the state and federal  
agencies 
responsible 
for 
administering 
unemployment  
compensation have given to it.  The majority ignores this  
principle, preferring a definition constructed from a  
dissenting opinion and dictionary definitions, which it  
contends is in keeping with the plain meaning of the statute.  
This approach is contrary to the reasonable interpretation  
advanced by the administrative agencies and to the purpose of  
and the policy underlying the MESA.  The term should be  
construed as not inclusive of retirement funds transferred  
directly into an individual retirement account.  
I would affirm the Court of Appeals holding that  
plaintiff was entitled to unemployment compensation benefits  
under the MESA.  
MARKMAN, J., took no part in the decision of this case.  
10