Municipalities in Charlevoix County, around Michigan, ordered to make plans to fund retirement benefits

Within 180 days, these entities must approve and submit a plan to the Municipal Stability Board that demonstrates their “underfunded status” has been addressed.

More than 100 local units of government, including some in Charlevoix County, will be developing plans to ensure the retirement benefits they promised their employees and retirees will be paid in the future, according to the Michigan Department of Treasury.


The local units are being required to submit corrective action plans due to having an underfunded pension plan, retirement health care plan—or both—as defined in the Protecting Local Government Retirement and Benefits Act.

The Boyne City Housing Commission and the Charlevoix County Public Transit Authority have both been identified with preliminary underfunded status. See document below for graphs containing details

Within 180 days, these entities must approve and submit a plan to the Municipal Stability Board that demonstrates their “underfunded status” has been addressed.

“Michigan’s local governments have an obligation to honor commitments made to retirees while maintaining adequate public services,” State Treasurer Nick Khouri said. “This is another important step as we implement last year’s legislation. Treasury looks forward to working with cities, counties and townships as they develop plans to ensure their long-term fiscal health.”

A retirement pension plan meets the state’s “underfunded status” if it is less than 60 percent funded and if an entity’s required contribution is greater than 10 percent of the entity’s total revenue. Retirement health care plans are considered underfunded if they are less than 40 percent funded and if the required contribution is greater than 12 percent of the total revenue.

Local units had the option of applying for a waiver to address their underfunded retirement benefits after being preliminarily identified as having an “underfunded status.”

Those entities that declined to file for a waiver or were denied a waiver must submit a corrective action plan to be reviewed by the Municipal Stability Board.

The Municipal Stability Board was scheduled to meet for the first time on Friday May 18. This was to be an organizational meeting and no action on corrective action plans was expected.

To date, the state Treasury Department has received retirement benefit information from roughly half of the local units of government required to report under state law.

Additional corrective action plans may be required as the remaining entities continue to submit their retirement benefit reports.

State law exempts public bodies that don’t offer a retirement pension plan or a retiree health care plan. No action was required by entities that only offer defined contribution plans, such as a 401(k) or 403(b).

School districts, colleges and universities are also exempt.

Passed by the Michigan Legislature and signed by Gov. Rick Snyder in December 2017, the Protecting Local Government Retirement and Benefits Act incorporates four phases for local units to use in addressing their fiscal health and the security of retirement benefits for retired municipal employees:

Transparency through reporting
Identification of potential problems; Review for fiscal health
Develop a corrective action plan