03. Benefit Computation Factors

Solgat v Accurate Mechanical – 3.05

Solgat v Accurate Mechanical
Digest no. 3.05

Section 27(f)

Cite as: Solgat v Accurate Mechanical, unpublished opinion of the Dickinson Circuit Court, issued June 29, 1995 (Docket No. D94-8517-AE).

Appeal pending: No
Claimant: Clement Solgat
Employer: Accurate Mechanical
Docket no.: B91-16599-123338W
Date of decision: June 29, 1995

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CIRCUIT COURT HOLDING: Where union employees receive a lump economic package pursuant to a labor contract and they decide how much to allocate to wages and how much will be devoted to fringe benefits such as pensions, the contribution to the pension fund is entirely that of the employee.

FACTS: Claimant was denied benefits after being laid off for lack of work in November 1990, because he was receiving a pension. Claimant had been a union pipefitter for many years. His union negotiated labor contracts under which employers agreed to pay pipefitters a certain amount of money. The union members then decided how much of the hourly rate would be paid to them in wages and how much would go to pay for various fringe benefits including the pension fund. The employers paid the lump sum amount for fringes directly into a fringe benefit fund. The balance was paid in wages.

DECISION: Claimant is entitled to receive unemployment benefits.

RATIONALE: The fact that taxes were not deducted from the funds forwarded to the union does not alter the fact the earned funds of the employees in the hands of the employer belonged in total to the employees. The employer merely disbursed it as directed once it had been earned by the performance of labor. “The plan was that of the employee and the contribution to the plan, in total, was that of the employee.”

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

03. Benefit Computation Factors

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