Pension Liabilities in Cities with Declining Populations: Case Studies throughout Michigan
In Michigan, several cities have underfunded their retiree pension plans and healthcare programs, forcing them to make changes to their plan or inject new funds to provide the promised benefits to their city workers and retirees. Two state bills, PA 202 in 2017 and PA 166 in 2022, sought to help make the funding more transparent and provide funding assistance to cities in Michigan. This paper evaluates the changes these bills brought to the cities’ funding of their pension plans and uses five case studies to gain a variety of perspectives on the impact of these bills. Overall, the study shows that the examined cities used a variety of strategies to improve funding levels, though some who had the foresight to make changes before they were required were left out of the benefits of state aid.