The Municipal Stability Board has released a best practices and strategies document to help local units of government find solutions to their underfunded retirement benefits, according to the Michigan Department of Treasury.
State law requires the Municipal Stability Board to annually review and update a list of best practices and strategies to assist entities with an underfunded pension, underfunded heath care plan or both. The document provides recommendations for the funding, design and administration of retirement benefits.
"This guidance is a starting point for problem-solving an entity's underfunded retirement benefits and developing a corrective action plan," said acting Deputy State Treasurer Anne Wohlfert, head of the State and Local Finance Group. "The board is looking forward to receiving feedback on this document from individuals and other stakeholders in the search of solutions to ensure the long-term financial health of our local units of government."
The gubernatorially appointed board has requested additional public comment and feedback on the document until Aug. 9, 2018. Following review of the additional comment and feedback, the board will reconsider the best practices and strategies document at their next scheduled meeting. Comments should be emailed to Treas-MunicipalStabilityBoard@michigan.gov with the subject line "Best Practices Comment: 2018."
To date, the state Treasury Department has received retirement benefit information from nearly all local units of government required to report under state law. Of those reviewed, nearly 150 entities are required to submit corrective action plans due to having underfunded retirement benefits.
State law exempts public bodies that don't offer a retirement pension plan or a retirement health care plan. No action is required by entities that only offer defined contribution plans, such as a 401(k) or 403(b).
School districts, colleges and universities are also exempt.
To learn more about the program or for a list of local units determined to have an "underfunded status," go to www.michigan.gov/localretirementreporting. For more information about Treasury's local government programs, follow @MITreasLocalGov on Twitter.
Published: Tue, Jul 24, 2018
