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A series of articles in Capitol Confidential documents the good, the bad and the ugly from county and municipal pension systems around Michigan.
Of the cities with the worst funded ratio, some have taken decisive action. The cities of Walker, in West Michigan, and Plymouth, in Wayne County, have shifted new employees to 401k-type accounts. These defined contribution accounts put a floor on the underfunding and a cap on politicians racking up future liabilities.
In the state legislature, a bill has been introduced that empowers citizens and elected officials to reform local retirement systems. House Bill 4804 helps level the playing field between taxpayers and public sector unions, who have an oversized influence on local politics.
The city of Detroit should serve as the canary in the coal mine for citizens and workers around the state; unsustainable pension systems are a problem that needs to be taken care of now. The evidence is overwhelmingly clear: Politicians in every corner of the state simply cannot be trusted to properly fund defined benefit pension systems. Retirement money should be placed in the hands of workers through defined contribution accounts.
Michigan Cities Least Funded Pension Systems
Does not include other post-employment benefits.
Source: Comprehensive annual financial reports
