Click for Ann Arbor, Michigan Forecast
Tuesday February 21, 2017
Follow us: facebook twitter RSS feed
Print Comment E-mail

What Price Pensions?

 

continued

Still, the county has again reversed course. Starting January 2014, new employees will once again go into a defined-contribution plan. "The public needs to know we closed defined benefits to new hires," McDaniel says. "We reached long-term agreements with our unions to make that possible. We now have ten-year contracts with most of them."

But since the Michigan constitution protects pensions, nothing short of bankruptcy can get the county off the hook for its past promises. And beyond legal responsibility, says Ann Arbor county commissioner Andy LaBarre, "we have a moral obligation to meet these liabilities." Board chair Yousef Rabhi, also from Ann Arbor, says the whole board, from "the most liberal Democrat to the most conservative Republican, agrees we have to meet our unfunded liabilities."

Because pensions are paid over time, though, the county doesn't have to meet all its liabilities at once. And as the markets have recovered, so has hope that investment returns could cover much of the burden. Earlier this past year, McDaniel proposed issuing $345 million in bonds and investing the proceeds in funds dedicated to retiree benefits. The theory is that the investments will return more than the interest cost on the bonds--or at the least, McDaniel says, "break even so as to not lose ground over the period of payoff."

Bookmark and Share
previous  ·  1 l 2 l 3 l 4 l 5 l 6 l 7 l 8  ·  next page
all on one page
read more stories here -> Marketplace  l  Culture  l  Community  l  News

You might also like:

NOTE TO SELF RE NEXT CHRISTMAS, by Mary A. Jones NOTE TO SELF RE NEXT CHRISTMAS, by Mary A. Jones
Ann Arbor Buses Ann Arbor Buses
Meredith Monk - On Behalf of Nature Meredith Monk - On Behalf of Nature
Parking Squeeze - The city wants downtown parki... Parking Squeeze - The city wants downtown parki...
Rip-roaring Return - A 1911 motorcycle  comes h... Rip-roaring Return - A 1911 motorcycle comes h...
Ann Arbor Buses Ann Arbor Buses
Photo: Groundcover News presents Jamie Morris Photo: Groundcover News presents Jamie Morris
Training Intervenors - ICPJ teaches Training Intervenors - ICPJ teaches "bystander ...
Map of Restaurants with Birthday Discount Map of Restaurants with Birthday Discount
Map of Restaurants with Catering Available Map of Restaurants with Catering Available
Regent Hotel
custom blinds and window treatments, flooring, and furniture
top of the lamp. All your in home lighting needs.
Holiday Inn Ann Arbor. Comfortable Hotel, a home away from home.
Become of Fan of the Ann Arbor Observer on Facebook
Victors For Art February 18th through June 11th
A visitor's guide to Ann Arbor