Dignan v. Michigan Public School Employees Retirement Board

**Dignan v. Michigan Public School Employees Retirement Board** This case involved a dispute over how retirement benefits are calculated for public school employees. Mr. Dignan, a retiring school employee, received a $14,500 terminal allowance payment when he left his job. He wanted this payment included when calculating his final average compensation, which determines how much he would receive in retirement benefits. The Michigan Public School Employees Retirement Board refused to include this payment, saying it didn't count toward his retirement calculation. Dignan challenged this decision in court, initially winning at the lower court level. However, the Michigan Court of Appeals reversed that decision and sided with the retirement board. The appeals court found that the retirement board's decision was correct based on the clear language in the employment contract, which specified what payments could and couldn't be counted toward final average compensation. This ruling matters for public school workers because it shows that retirement benefit calculations are strictly governed by contract language. Workers should carefully review their employment contracts and retirement plan documents to understand exactly what compensation counts toward their retirement benefits, as not all end-of-employment payments will boost their final retirement calculations.