ED WHITE, Associated Press
DETROIT (AP) — A psychologist owes $34,000 to the Michigan school retirement fund because of a part-time job in which he earned just $5,000.
The Michigan appeals court called the punishment “draconian” but ruled in favor of the retirement system, saying the law that penalizes some contractors isn’t unconstitutional.
Michael Irla retired in 2010 after working 31 years in the Lamphere district in Madison Heights, a Detroit-area suburb. A law signed that same year says retirees forfeit certain pension and health insurance benefits if they perform “core services” at schools as contractors.
Irla, 64, of Royal Oak said he didn’t know about the restriction and even reported his mistake to the state. He was hired by a private agency, Therapy Solutions Unlimited, to work at charter schools during the 2010-11 school year.
“One might wonder if the Retirement Service would take the same position if Irla earned only $1,000 during the relevant time or $100, or even $1,” a three-judge panel at the appeals court said last week.
“Moreover, the fact that Irla himself caught the error and reported it to the Retirement Service seems to militate against strict enforcement. But it is not this court’s role to question the wisdom of the statute or to manage its enforcement,” said judges Michael Kelly, Mark Cavanagh and Patrick Meter.
Irla is on the hook for $21,000 in pension payments collected while he worked at charter schools, as well as $13,000 for health insurance.
“He called them up and reported this himself. He’s as honest as the day is long,” Irla’s lawyer, William Roy, said Friday. “He wouldn’t work to make $5,000 to lose $30,000. Nobody does that.”
Public schools, including some charter schools, must make regular contributions to the pension system for employees. The law apparently was intended to discourage them from using retirees as contractors in key jobs to get around that requirement.
In Irla’s case, state attorneys defended the tough action, noting the law was included in documents given to retirees.
“Unfortunately, I missed the import of the language on page 28 of the ‘After You Retire’ pamphlet,” Irla told the retirement system.
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