Lansing's unfunded pension liabilities grow by $27.2 million

Lansing's unfunded pension liabilities grow by $27.2 million

January 20, 2020

The latest actuarial valuation reports for Lansing's two pension systems came out last month. They show that total unfunded liabilities grew by about $27.2 million - from $265,913,045 last year to $293,142,591 this year. The reports are based on information provided to the actuary by the City at the end of 2018, so they don't reflect the most recent changes in union contracts.

Actuarial valuation reports for pensions are done yearly, while those for retiree health care are done every two years. The latest reports for retiree health care came out in December 2018. They showed a total unfunded liability of $416.5 million. So according to the latest reports, the total for pensions and retiree heath care is $709.6 million.

The funding percentage for both systems went down - for Police & Firefighters, from 68.4% to 64.7%; for all other employees (the Employees Retirement System (ERS)), from 58.6% to 56.7%.

Here is the 18-year history of Police & Fire pension funding:

Police & Fire Retirement System (P&F)
As of December 31:	Actuarial Value of Assets	Actuarial Accrued Liability	Percentage Funded	Unfunded Actuarial Accrued Liability
2001	280,518,000	249,204,000	112.6%	(31,314,000)
2002	280,686,000	259,282,000	108.3%	(21,404,000)
2003	277,947,000	267,786,000	103.8%	(10,161,000)
2004	275,807,000	279,873,000	98.6%	4,066,000
2005	275,216,000	290,299,000	94.8%	15,083,000
2006	278,839,000	308,193,000	90.5%	29,354,000
2007	293,571,000	315,635,000	93.0%	22,064,000
2008	287,394,000	326,673,000	88.0%	39,279,000
2009	280,342,000	337,315,000	83.1%	56,973,000
2010	276,377,041	359,293,016	76.9%	82,915,975
2011	264,492,738	372,547,509	71.0%	108,054,771
2012	257,898,061	373,083,911	69.1%	115,185,850
2013	277,267,947	383,879,280	72.2%	106,611,332
2014	288,785,965	395,089,321	73.1%	106,303,356
2015	292,531,481	410,189,555	71.3%	117,658,075
2016	294,311,956	424,264,103	69.4%	129,952,147
2017	302,362,351	441,891,242	68.4%	139,528,892
2018	296,163,457	457,988,405	64.7%	161,824,949

Here is the history for ERS:

Employees Retirement System (ERS)
As of December 31:	Actuarial Value of Assets	Actuarial Accrued Liability	Percentage Funded	Unfunded Actuarial Accrued Liability
2001	191,311,000	213,648,000	89.5%	22,337,000
2002	192,920,000	215,405,000	89.6%	22,484,000
2003	199,329,000	221,088,000	90.2%	21,759,000
2004	206,200,000	231,389,000	89.1%	25,189,000
2005	207,881,000	241,882,000	85.9%	34,001,000
2006	208,765,000	251,427,000	83.0%	42,662,000
2007	208,572,000	254,356,000	82.0%	45,784,000
2008	200,600,000	258,331,000	77.7%	57,731,000
2009	193,324,000	262,298,000	73.7%	68,974,000
2010	187,440,590	269,461,935	69.6%	82,021,345
2011	177,100,863	287,306,707	61.6%	110,205,844
2012	167,569,807	293,974,433	57.0%	126,404,626
2013	172,687,582	313,258,746	55.1%	140,571,164
2014	177,259,421	309,924,744	57.2%	132,665,323
2015	176,031,902	308,794,993	57.0%	132,763,091
2016	176,160,086	305,886,505	57.6%	129,726,419
2017	178,646,143	305,030,296	58.6%	126,384,153
2018	172,090,691	303,408,333	56.7%	131,317,642

The amount the City has to allocate for pension funding this year is $26,156,048. This is how it has grown since 2011:

Fiscal Year	Police & Fire	ERS	Total City Contribution
2011	7,820,716	6,925,200	14,745,915
2012	9,240,832	6,937,354	16,178,185
2013	10,134,008	8,586,530	18,720,539
2014	11,225,102	9,366,132	20,591,234
2015	11,037,593	10,545,409	21,583,002
2016	10,885,519	10,180,879	21,066,398
2017	11,521,768	10,246,872	21,768,640
2018	12,562,547	10,185,060	22,747,607
2019	13,554,239	9,880,932	23,435,171
2020	15,457,647	10,698,401	26,156,048

According to the 2010 census, the number of households in Lansing is 49,505, so each household's share of the $709.6 million unfunded pension and retiree health care liability is $14,334.

Links to the actuarial valuation reports are on this page on the City's website.

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