Grand Traverse Co Officials Look to Fix Pension and Healthcare Benefit Debt
With more than $58 million in debt, Grand Traverse County is dealing with one of the worst pension funding situations in the state.
County commissioners are looking over a 26 page report to help them start to make a dent in their defined benefit plan problem.
The document outlines growing issues and millions of dollars in liability in the county’s pension plans and retiree health insurance.
“We are the lowest funded pension plan of any county of MERS (Municipal Employees Retirement System) in the state of Michigan. Not a good position to be in.”
This 26 report landed in the hands of Grand Traverse County commissioners on Wednesday.
Inside it are pages and pages outlining the county’s $58 million debt towards pension and healthcare benefits.
“This is what’s creating all the other budget problems. We are required to meet our pension obligations and they accelerate at a rapid rate,” says county administrator Tom Menzel.
Turning a blind eye for decades led to more debt, and an alarming situation.
“The health retirement has never been funded. It’s zero funded. So we have to make that up as well, and we have a short timeline to do it in terms of when we’re required to pay it back,” Menzel says.
The former state budget director did the report. It shows revenue into the county has decreased for years, and the future looks dire.
“It gets a sense of urgency on what we have to do so we can make the tough decisions,” says Menzel. “We have to make structural changes to get our long-term obligations down. If we don’t the trajectory keeps going up and creates immense problems for us in our ability to pay.”
There are recommendations like increasing employee and employer contributions to pension plans, and eliminating access to retiree health insurance for new hires. Everything is on the table.
“You just can’t ignore it anymore and it’s not a good spot to be in because you have to make very difficult decisions because decisions weren’t made years ago,” says Menzel.
County commissioners will meet on March 16 to discuss the report and future changes.