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Gov. Whitmer Awards Funding to Shore Up Retirement Savings for Michigan Seniors, Putting More than $553 Million Back into their Pockets
September 20, 2023
LANSING, Mich. – Today, Governor Gretchen Whitmer announced that more than $553 million in Protecting MI Pension Grant awards are being sent to 123 Michigan communities, putting dollars back into the pockets of retirees and offsetting costs for local communities, keeping them from having to divert funds from critical public services.
“After a lifetime of hard work, Michigan seniors deserve to retire with dignity,” said Governor Whitmer. “Today’s Protecting MI Pension Grants will ensure that Michiganders who served our communities as police officers, firefighters, sanitation workers, and in so many other invaluable professions, will receive the stable, secure retirement that they earned. I am proud that earlier this year, I signed legislation rolling back the retirement tax on our seniors, saving half a million households an average of $1,000 a year, putting money back in their pockets for gas, groceries, or gifts for their grandkids. Today, we are continuing to deliver on our promise to Michigan’s seniors and shoring up municipal budgets across the state. Let’s keep putting money back in people’s pockets and building a brighter future.”
The Protecting MI Pension Grant Program was created to help Michigan’s underfunded municipal systems. Under the Fiscal Year 2022-23 budget, the Michigan Department of Treasury was appropriated dollars to establish and operate a program for qualified retirement systems that were underfunded as outlined in state law.
Under the grant program, eligible cities, villages, townships, counties, and road commissions were encouraged to review their retirement system funding and apply for a grant by mid-June. A complete list of grant award communities can be found online.
“A major budgetary concern for our local governments is their pensions systems,” said State Treasurer Rachael Eubanks. “Funding these systems enables our communities to uphold their commitment to 25,000-plus public servants and focus on providing the services Michiganders come to expect.”
Local units of government from every Michigan region received a grant award.
"Receiving this grant is a huge weight off the village's shoulders,” said Tom Ebenhoeh, interim village administrator of the village of Chesaning. “With an underfunded liability like that, it is constantly in the back of your mind. Having this relief brings us that much closer to being able to reach our goal of a pension that is secure. It has turned a 20-year project into a five-to-eight-year project when it comes to getting our pension reasonably funded. It also means the extra resources we are investing into the pension now will sooner be available to put elsewhere in our community."
“Rising pension payments have drastically affected the City of Saginaw’s ability to provide necessary services to our citizens,” said Tim Morales, city manager of the city of Saginaw. “Saginaw has taken measures to reduce legacy costs including eliminating the pension program over 20 years ago and eliminating retiree healthcare 15 years ago. The city has also made payments in excess of our Annual Required Contribution (ARC); however, the impact of these actions hasn’t resulted in reducing our annual contribution. The Protecting MI Pension Grant Program will significantly improve our financial stability and help provide an overall benefit to our operations and ability to provide essential services. We are very grateful that the state of Michigan has awarded this funding to the city.”
"This grant award will provide a much-needed boost to the city's ongoing efforts to address its underfunded pension liability,” said Erin E. LaPere, city manager of the city of Charlotte. We have made changes to our benefits, but our legacy costs continue to place a significant strain on the overall pension system's funding levels and the city's overall budget. For the past two years, City Council has approved funding additional $150,000 above the required annual contribution into our pension plan, but our current underfunded liabilities are approximately $14 million. As a small, rural municipality that operates on minimal staffing, this grant from the state will help bolster our ongoing efforts and accelerate our work towards fully funded status."
“The City of Sault Ste. Marie Police and Firefighters Pension is very pleased to be awarded $2,636,455 from the Protecting MI Pension Grant Program,” said Kristin M. Collins, finance director/treasurer of the city of Sault Ste. Marie. “The award is the full amount of our request and the maximum allowable amount that would bring the fund out of underfunded status. While funding levels have improved over the past five years, increasing from 52% to 57%, it’s a slow climb and this infusion will provide a boost that the fund really needed.”
“We were very excited to receive the news that we would be a recipient of the Protecting MI Pension Grant Program,” said Dan Stoltman, city manager of the city of Norway. “Helping us get to the 60% funded status makes the light at the end of the tunnel a little closer and a lot brighter for our future.”
“We have many priorities, in Lansing, and our long-term financial stability is always in mind as we do everything we can to grow Lansing. Long-term liability through pension obligations has tremendous impacts on our ability to service our residents and retirees,” said Mayor Andy Schor, city of Lansing. “We have implemented smart, responsible changes to bring our unfunded liability down significantly, and this grant will be another great step forward. I thank the Legislature and Governor for helping communities to serve their residents and to provide the pension payments for our retirees,”
“The City of Dowagiac is very pleased that the State of Michigan and Michigan Department of Treasury understand the importance of the pension system for public employees and established the Protecting MI Pension Grant Program that will strengthen the City of Dowagiac’s municipal pension system” said Kevin Anderson, city manager of the city of Dowagiac. “Especially now, when inflation is taking a bite out of local government’s ability to fund critical community services, the funding provided through the Protecting MI Pension Grant Program will not only strengthen the city’s retirement system, but also provide room within our annual budgets to continue to meet the service expectations of our citizens. We are also grateful for the Department of Treasury’s administration of the grant process. The process was clear, the grant documentation concise, and the communication was timely.”
“The Protecting MI Pension Grant Program was a real blessing to the City of Benton Harbor and our thanks to the Governor, Treasury, and the Governor’s whole team” said Ellis Mitchell, city manager of the city Benton Harbor. “As Benton Harbor is a financially distressed city, without this grant, the city would have had to place an additional burden on our citizens that they could not afford or have been years trying to catch up. Thank you again.”
“The Protecting MI Pension Grant Program is critically important for communities like Hazel Park with underfunded pension systems. The Grant Program provides relief for taxpayers and protects the pensions of retired workers” said Edward Klobucher, city manager of the city Hazel Park. “One of the best pieces of legislation for cities to come out of Lansing in decades!”
“The Ottawa County Road Commission is very appreciative of the Michigan Department of Treasury and the grant received to assist our underfunded pension system,” said Brett Laughlin, managing director of the Ottawa County Road Commission.
“The award from the Protecting Michigan Pension Grant program will benefit Presque Isle County Road Commission by reducing the length of time needed to reach our goal of being 100% funded for our MERS pension plan,” said David A. Kowalski, superintendent/manager of the Presque Isle County Road Commission. “Additionally, the grant award will help ensure financial stability going forward and allow the Road Commission to budget better for equipment purchases and road projects.”
Building a Trusted Partnership with Michigan communities, the Michigan Department of Treasury has developed tools and resources to help local communities navigate budget processes and enact the best practices to achieve fiscal stability. Programs like Protecting MI Pension Grant Program help alleviate some budget pressures and enable resources to be dedicated to important services that residents depend on every day.
To learn more about the Protecting MI Pension Grant program – including a list of grant award recipients, program description and frequently asked questions – go to Michigan.gov/MIPensionGrant.