Opinion ID: 2222778
Heading Depth: 1
Heading Rank: 3

Heading: question v. did 1977 pa 275 satisfy constitutional funding and plaintiffs' prayers?

Text: Passage of 1977 PA 275 drastically changed the focus of this case. Prior thereto plaintiffs had the burden of proof; subsequently the burden of proof shifted to defendants. According to plaintiffs' complaint for the fiscal years 1974-1975 and 1975-1976, the Legislature appropriated inadequate funds to cover both the post-con current service requirements and the pre-con unfunded accrued liabilities, i.e., the pre-con benefit payments. Further, according to plaintiffs' brief the MPSERS Board borrowed from post-con current service reserves to pay pre-con benefits. Plaintiffs' burden was to establish these facts and the Court of Appeals opinion substantially agreed they had done so. With the passage of 1977 PA 275, defendants maintained that all constitutional funding requirements were now satisfied and that the constitutional status of MPSERS was restored. It therefore became defendants' procedural obligation in this case to prove that all constitutional funding requirements were met, including rectifying any previous extra-constitutional diversions or underfunding. Plaintiffs, in making their proofs in the Court of Appeals, developed with defendants an agreed statement of facts, which plaintiffs state in their brief contained within it a substantial amount of the data necessary to calculate the amount of underfunding with precision. In short, plaintiffs admit that the agreed statement of facts does not have complete data to establish exactly the amount of underfunding. Defendants in attempting to prove that 1977 PA 275 satisfies all constitutional requirements and rectifies any diversion or underfunding offer as proof the general statement following: Subsequently, in 1977 PA 275, MCL 38.227; MSA 15.893(27), MCL 38.345; MSA 15.893(85), the Legislature provided funds to pay the unfunded accrued liabilities portion of the MPSERS Chapters I and II 1977-1978 fiscal year retiree payroll in conformity with the writ of mandamus issued by the Court of Appeals. Further, this legislative retrospective reallocation of previously appropriated excess funds, funds derived from the difference between the attained age and entry age methods of actuarial valuation of current service contributions, provides sufficient excess funds to pay the unfunded accrued liabilities portion of the MPSERS Chapters I and II retiree payroll, for the 1974-1975 through 1977-1978 fiscal years, without using funds required for current service contributions under Const 1963, art 9, § 24. Thus, all of the claims made by plaintiffs in their petition for mandamus, concerning the alleged underfunding of the MPSERS Chapters I and II and the use of current service moneys to pay unfunded accrued liabilities during the 1974-1975 and 1975-1976 fiscal years, have been fully addressed by the Legislature in 1977 PA 275, supra, and rendered moot. (Footnote omitted.) Defendants-Appellees' Brief, pp 4-5. This statement, like plaintiffs' proofs, is lacking in definitive figures. This Court therefore searched the entire record in this case to find the annual appropriations required by the actuaries to properly fund current service reserves, the annual appropriations requested by the Executive to meet the actuaries' requirements and the actual appropriations specifically dedicated by the Legislature to this purpose as well as the exact amounts made available by 1977 PA 275 and related acts, if any, to determine whether any shortfall due to Executive borrowing or legislative underfunding was satisfied by 1977 PA 275 as claimed by defendants. This Court was unable to find data to fulfill this purpose. Since the missing data presumably are official governmental figures, open to public inspection, this Court then sought through the Court Clerk to locate this data of which it might take judicial notice in order to determine whether indeed 1977 PA 275 did resolve past constitutional problems and render the case moot. The Court Clerk contacted the MPSERS Board as the most likely source of information with copy of the letters requesting information to defendants. Unfortunately the data produced by this inquiry was inadequate to permit this Court to resolve the remaining legal problems in this case. The inquiry did, however, produce information that the Legislature upon recommendation of the Executive probably underfunded current services during the 1975-1978 fiscal years. [27] Plaintiffs and defendants differ radically as to how much that underfunding was, however, the shortfall from 1974 to 1978 may have been as high as $207,698,000. In this state of the record this Court cannot properly determine whether the Legislature has by 1977 PA 275, and other related acts, if any, satisfied the requirements of Const 1963, art 9, § 24, as defendants aver. Likewise, we cannot determine by what amounts the Legislature has failed to satisfy the requirements of Const 1963, art 9, § 24, if these requirements have not been satisfied. [28] In view of this situation, we remand this matter to the Court of Appeals to make such findings as necessary and such determinations as appropriate. In passing, we cannot fail to note that separate accounting for the pre-con and the post-con current service reserves of the out-state system was terminated on June 30, 1974, and that the two accounts were merged into the pension reserve fund. [29] Obviously these accounts serve different purposes and have different constitutional obligations. It appears that this merging continues, [30] but the matter has not been specifically argued. However, it is not beyond plaintiffs' prayer for mandamus against any    public officers or employees who [have not performed their] duties under 1945 PA 136, as amended to observe that it is questionable whether there could be full compliance with the intent of such legislation and Const 1963, art 9, § 24, unless the post-con funding accounts are separate and apart from the unfunded accounts; otherwise, it becomes difficult or impossible to ascertain whether there has been a departure from constitutional dedication. Finally, in the event underfunding is found by the Court of Appeals, it will be necessary for this Court to consider remedies in response thereto. Plaintiffs argued several alternatives in their thoughtful brief, including some which do not require the issuance of mandamus to the Legislature. The non-mandamus remedies focus on the potential implementation of an alleged self-executing allocation to MPSERS in Const 1963, art 9, § 11, and the potential institution of a State Treasury drawing rights priority. Defendants did not respond to the remedies proposed by plaintiffs. Rather, they maintained that the entire relief sought by plaintiffs had been granted by enactment of 1977 PA 275. We have not determined the validity of plaintiffs' arguments as to these possible remedies.