The lawsuit filed in the Michigan Court of Claims in Ingham County was brought by five unions representing 34,000 state workers: the United Auto Workers Local 6000; the Service Employees International Union Local 517M; the American Federation of State, County and Municipal Employees Council 25; the Michigan Corrections Organization, and the Michigan State Employees Association.
Under the new law, employees who don't want to contribute 4 percent of their pay to remain in the "defined benefits" pension plan can switch to a 401(k)-style pension plan with benefits dependent on investment returns and not guaranteed, the Detroit Free Press reported Monday.
The suit alleges the law is unconstitutional because the Legislature acted without consulting or seeking the approval of the Michigan Civil Service Commission, which is responsible for state employee compensation issues.
"The Legislature should not be allowed to interfere with a process that works," said Cindy Estrada, an international vice president of the UAW and spokeswoman for the coalition of unions.
But officials working for Republican Gov. Rick Snyder allege the new law sits in steady legal ground because it lets affected employees switch to another plan if they do not wish to make the 4 percent payments.