Washtenaw County retiree pension and benefit plans underfunded by nearly $240M
The county has 1,010 active members and 740 retirees/beneficiaries under the Washtenaw County Employees Retirement System, a defined benefit pension plan started in 1948.
With accrued liabilities totaling $283.3 million and assets valued at $199.1 million, the WCERS plan is $84.3 million underfunded (or 70.3 percent funded). At the end of 2007, it was 79.3 percent funded, so the trend in recent years has been downward.
The county has another 286 active members and 21 retirees/beneficiaries under the Municipal Employees Retirement System, a separate defined benefit pension plan run by the state for Washtenaw County Sheriff's Office employees.
With accrued liabilities totaling $49.4 million and assets valued at $44.5 million, the MERS plan is $4.9 million underfunded (or 90.1 percent funded). At the end of 2007, the plan was 73 percent funded, so the trend in recent years has been upward.
Additionally, the county has 1,303 active members and 726 retirees/beneficiaries in its Voluntary Employees Beneficiary Association, a trust that funds retiree health care.
With accrued liabilities totaling $210.2 million and assets valued at $60.4 million, the VEBA is $149.7 million underfunded (or 28.7 percent funded). At the end of 2007, it was 27.3 percent funded, so not much has changed with the funded ratio in recent years.
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County Administrator Verna McDaniel noted the county was ahead of the curve in establishing a VEBA trust in 1996 to fund health benefits for future retirees. It wasn't until 2004 that the national Governmental Accounting Standards Board issued new guidelines for governments to account for future retiree benefits while employees are still working and earning the benefits.
McDaniel said the county is working collaboratively with its labor unions to bring costs down. But she said the fact that the county has the burden of those future liabilities isn't anything to be ashamed of — the county is proud to invest in its employees' futures and provide the kind of benefits they deserve.
The Washtenaw County Board of Commissioners is expected to meet at 4 p.m. today to ratify a new labor agreement with its largest union, AFSCME Local 2733, which represents 644 employees. McDaniel said the union's members have agreed to pay more toward the cost of both their health care and pensions.
More details are expected to be disclosed later today.
The county is faced with an estimated $17.5 million budget deficit over the next two years and county officials are aiming for $8 million in employee concessions to help close the gap. McDaniel said on Monday the same concessions achieved with AFSCME Local 2733 are expected to be imposed on the county's nonunion employees.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at firstname.lastname@example.org or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.