The Michigan Public School Employee Retirement System is underfunded by $26.7 billion, meaning only 61 percent of the money needed to pay its costs has been set aside.
This school retirement system now gobbles up 36 percent of school payroll costs, limiting teacher wage increases and requiring cuts to other school services. And things are just as bad in local governments.
Only a few of Michigan’s cities and counties fully fund their pension systems. The average municipalities is funded at only 66 percent – with more than $6.7 billion in total liabilities. This has contributed to the fiscal crises in Detroit, Flint and elsewhere.
Shift new public employees to a 401(k)-style, defined contribution plan as was done for state employees in 1997.
Begin paying down the balances owed to current pension plans to ensure no future emergency bailouts are required.
Honor all pensions that have been promised to existing workers and retirees.
Add my name to the list of concerned citizens who want to solve the underfunded pension problem before my public services are cut.
For decades, state legislators and governors, Republican and Democrat, have promised billions more in pensions than has been saved to pay for them.
Last year, the state put roughly $2 billion towards pension benefits of its largest pension system and unfunded liabilities still grew. This repeated underfunding has led to large liabilities that will require severe cuts to public services.
I'm concerned about Michigan's underfunded pension affecting my public services.Join Us
Let's put our future safely back in our own hands.