$27 million buys Lansing residents nothing

August 5, 2025

The City of Lansing is paying out $27 million a year for past mistakes. It buys us nothing. The $27 million could have gone toward fixing busted-up streets and non-navigable sidewalks and hiring more police and firefighters, but no - it has to be used to pay off our arrearage on pension funding. It is like making payments on a car you totaled years ago.

The total amount owed is $344,562,594. If we keep up with our payments, we'll have it paid off in 30 years.

Lansing has two pension systems, one for police and firefighters (P&F) and another for all other city employees (ERS. The figures stated here are the combined totals. The amounts are called "unfunded actuarial accrued liability" and they come from page 27 of the annual actuarial valuation reports. P&F's is here and ERS' is here.

The $344,562,594 arrearage was accumulated in the last 20 years. In 2001, pensions were 101.9% funded. We went downhill from there:

As of December 31:	Actuarial Value of Assets	Actuarial Accrued Liability	Percentage Funded	Unfunded Actuarial Accrued Liability
2001	471,829,000	462,852,000	101.9%	-8,977,000
2002	473,606,000	474,687,000	99.8%	1,080,000
2003	477,276,000	488,874,000	97.6%	11,598,000
2004	482,007,000	511,262,000	94.3%	29,255,000
2005	483,097,000	532,181,000	90.8%	49,084,000
2006	487,604,000	559,620,000	87.1%	72,016,000
2007	502,143,000	569,991,000	88.1%	67,848,000
2008	487,994,000	585,004,000	83.4%	97,010,000
2009	473,666,000	599,613,000	79.0%	125,947,000
2010	463,817,631	628,754,951	73.8%	164,937,320
2011	441,593,601	659,854,216	66.9%	218,260,615
2012	425,467,868	667,058,344	63.8%	241,590,476
2013	449,955,529	697,138,026	64.5%	247,182,496
2014	466,045,386	705,014,065	66.1%	238,968,679
2015	468,563,383	718,984,548	65.2%	250,421,166
2016	470,472,042	730,150,608	64.4%	259,678,566
2017	481,008,494	746,921,538	64.4%	265,913,045
2018	468,254,148	761,396,738	61.5%	293,142,591
2019	446,760,668	774,045,635	57.7%	327,284,967
2020	487,123,871	805,031,291	60.5%	317,907,420
2021	506,992,797	812,245,843	62.4%	305,273,046
2022	487,556,285	832,118,879	58.6%	344,562,594

Each system (P&F and ERS) has its own retirement board which meets monthly. The boards are ultimately responsible for getting us into this mess. They hire the actuary and he presents them with the analysis that tells them what they need to do to keep the systems funded. It is possible that he steered them wrong, but it seems like they would have caught on after a while. It is also possible that the city didn't come up with the annual payments the actuary said was necessary to keep the systems fully funded. I do not know. It is a mystery. What I do know is that it is a colossal disaster and the people of Lansing did not deserve it.

Essentially, the pension plans are too generous and the city was unable to pay for them. For many years, police and firefighters could retire at any age with 25 years of service. They were retiring before they reached 48. The multiplier used in calculating the benefit is 3.2% for police and firefighters hired before May 20, 2014 (compared to 1.5% for state employees). There were instances where the pension was higher than the salary.

The event that put a big hole in funding for the Employees Retirement System was the early retirement of 1992, when Teamsters members who agreed to retire by January 4, 1993 would get their multiplier increased from 2.5% to 2.75% and they'd get an extra 5 years of service credit. An extra 5 years would also be added to their service for purposes of eligibility. On top of that, a provision from years earlier tied department heads and other non-union employees to any contract negotiated with the Teamsters. As a result, 144 employees retired including the mayor, city clerk and several department heads.

Lansing isn't the only municipality in this mess. It is so widespread that the legislature created a program to bail out the most underfunded retirement systems. They got enough to bring their funding up to 60%. Lansing's Employees Retirement System got $11,551,892. Here's the full list of systems that got money. The legislature appropriated $750 million for this program.

It is clear to me that few of these pension plans would be underfunded without collective bargaining. Bargaining sessions are where all the dirty deals are done out of view of the public. To put an end to retirement plans taxpayers cannot afford, we need to repeal the Public Employment Relations Act, the state law that forces municipalities to engage in collective bargaining. Collective bargaining sessions are one of the few situations where Michigan's Open Meetings Act doesn't apply. There are no meeting minutes. Nobody is allowed to attend other than the union reps and the mayor's labor relations director. Nobody is there to speak for the people. If the union thinks the other side is being difficult, it screams "UNFAIR LABOR PRACTICE" and complains to the Michigan Employment Relations Commission. But all too often, the local administration is agreeable to union demands. The mayor appreciates the union's endorsement and contributions to his campaign. Anyway, the cost of enhanced retirement benefits is not likely to be felt until he is out of office.

In the case of the Lansing's early retirement of 1992, Finance Director Steve Duarte used a collective bargaining session to give himself a pension at the age of 45. According to the lawsuit of labor relations director Richard Putney, Duarte excluded him from the session and presented the plan himself. Getting the agreement with the Teamsters made it easy to slide by city council. It got him a $56,058 pension at age 45 and he went on to become Kent County's director of financial services.

If the people of Michigan allow forced collective bargaining for public employees to continue, they deserve third-world roads.

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