MIDLAND, MICH. — The Mackinac Center for Public Policy updated its map showing the fiscal health of pension systems in Michigan’s largest 100 municipalities. The map displays the total costs and unfunded liability within each, allowing for easy comparisons across Michigan.
This update illustrates how cities have progressed in funding their pension systems. The interactive map allows users to track changes in the fiscal health of pension systems.
Based on this most recent data, the total unfunded pension liability across Michigan’s 100 largest municipalities is $5.572 billion. To make good on this debt, every resident in those municipalities would have to pay $1,048. These unfunded liabilities represent the difference between the costs of the pensions municipalities have promised their retirees and how much these entities have actually saved to fund them. Delaying paying these costs puts retirees’ pensions at risk and pushes higher costs onto future taxpayers.
Not every municipality has pension problems. The most recent data shows that five municipalities have a fully funded pension system and another 15 municipalities use defined-contribution retirement plans for their employees. Defined-contribution plans ensure that employees are paid their retirement as they are working and therefore prevent governments from deferring costs.
“Local governments have a responsibility to fulfill their promises to retirees. In order to do so, they must make fiscally sound policy decisions,” said James Hohman, director of fiscal policy at the Mackinac Center.
Read more about the significance of maintaining a healthy pension system here.
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