New laws address underfunded retirement plans

Michigan

LANSING, Mich. (AP) — Gov. Rick Snyder has signed bills aimed at getting a handle on municipalities’ underfunded pension and retiree health care plans.

The laws enacted Wednesday require local communities to report annually so state officials can identify unfunded liabilities.

Roughly a third of Michigan’s 1,800 local governments provide post-retirement benefits, but many are not setting aside enough money today to pay for them later.

Municipalities with severely underfunded plans will submit correction actions to a new state board, but the board will not be able to force changes.

The Republican governor calls the legislation an “important step forward,” saying it provides a framework to help move more communities to “greater financial stability.”

Snyder and the Republican-led Legislature dropped provisions that had led police and firefighters to oppose potential benefit cuts.

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