Montmorency Co. ponders pension bonds
MONTMORENCY — The Montmorency County Board of Commissioners on Wednesday agreed to allow Commissioner Daryl Peterson and Vice Chairman Don Edwards to obtain more information about pursuing a bond sale to address the county’s unfunded pension debt.
Peterson plans to meet with officials from Rogers City, who are currently going through the bond process to stabilize their own payments toward pension debt. Edwards plans to meet with officials in Crawford County, who sold bonds in 2016 to stabilize their own payments toward unfunded pension debt.
Montmorency County’s pension obligations to current and future retirees are about 55% funded, according to the Municipal Employees Retirement System of Michigan, the county’s pension manager. That means that, if all retirement benefits were claimed today, a little over half of the retirees would receive what they are owed. The further behind a government is on its pension debt, the more it must set aside each year to catch up.
Rogers City’s pension obligations are about 48.5 percent funded.
“We are looking at changes to the MERS retirement program, which is right now defined benefits,” Peterson said.
Peterson previously told The News the county’s employees currently have a defined benefit plan — or pension — which means that the retirement benefits are guaranteed.
However, commissioners changed retirement benefits for newly hired, non-union county employees earlier this year. Newly hired, non-union employees are now receiving a defined contribution plan, in which the employees’ payments toward their retirement are set, but ultimate benefits are not.
Under that plan, those employees can contribute 3% of their wages toward retirement and the county will match 7%. Those employees can also choose to open a 401(k)-type program through which they can earn up to a $1,000 match from the county.
County officials want to learn more about the bonding process ahead of contract negotiations with the county Sheriff Department’s unionized employees, which are set to begin in the fall. Peterson said the county proposed a defined-contribution plan, such as an 401(a), to the union during negotiations last year, but said “it didn’t go through.”
“We basically have three months to work on this,” he said of the timeframe commissioners have before negotiations with the police union begins.
Commissioners also want to explore how much money any changes might cost the county. Chairman Dave Wagner expressed concerns there may not be enough money in the county’s fund balance, or cash on-hand account, to pursue bonding.
County Treasurer Jean Klein not provide The News with the county’s general fund fund balance on Wednesday. Instead, she directed The News to speak to the county commissioners.
The Michigan Constitution says all financial records, accountings, audit reports and other reports of public moneys are public records and open to inspection.
Wagner was able to provide The News with a figure. He said there’s currently about $578,000 in the account, which is a decrease of about $200,000 from where the account was last year at this time. He said that’s not necessarily an unusual amount, because the county is waiting for revenue to come in from taxes.
Wagner previously told the news the county has been able to make its payments to MERS and has a payment of $100,000 planned for this year.
“We all know something has to happen but what it is, we don’t know yet,” Wagner said. “But we are moving forward, that’s the main thing.”
Crystal Nelson can be reached at 989-358-5687 or email@example.com.