Corrective action plan on benefits addressed

February 15, 2019

Bloomfield Township will submit a corrective action plan to the state to indicate how it will cope with underfunded retirement benefits the township must address under a state law that went into effect last year.

 

Under the Protecting Local Government Retirement and Benefits Act, or Public Act 202 of 2017, municipalities that have at least one retirement health benefit system that has determined to be underfunded must submit a corrective action plan. A retirement health system is considered underfunded if it is less than 40 percent funded, and if the annual required contribution for all of the retirement health system of the municipality is greater than 12 percent of that government's annual fund revenues.

 

Prior to the law, which went into effect on January 1, 2018, Bloomfield Township was a “pay-as-you-go community,” meaning benefit contributions were made each year as they came due. Under that structure, amounts were limited to 12 percent of its general fund, with the township at about 6.4 percent of its general fund.

 

Bloomfield Township Finance Director Jason Theis said at the township's board of trustees meeting on Monday, February 11, that the township had already submitted a correction action plan; however, that plan was denied by the state as a community survey and specific actions were not yet considered complete. The township has 60 days from the day of the denial to submit an updated plan, which trustees unanimously approved on February 11. However, Theis said it is anticipated the plan will again be denied by the state, as a full plan is still being updated.

 

“There are some things that still need to be filled out, but we don't have that data ready,” he said. “We feel they are pushing us to make a decision that we should take our time on. We will file and expect it to be denied, but we are filing what the state is asking at this time. We had 60 days to respond once we got the denial. We will go back before the board within 60 days to review the updated form, then respond within probably 30 days, and have another 60 days if it's denied. We will probably do this a couple more times as we get into the fall.”

 

The township said in December 2018 that it was working on ways to address about $164 million in unfunded liabilities owed by the department, and how to raise funding levels to the new requirement of 40 percent. 

 

Township Supervisor Leo Savoie said in December that a community survey would be conducted to get a pulse of the residents and what direction they would like the township to move, which could be a combination of bonds to address Other Post-Employee Benefits (OPEB), a reduction in services and increasing some fees.

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