DALLAS --Municipal retirement systems will be required to report on their unfunded pension and retiree health care costs annually under legislation signed by Michigan Gov. Rick Snyder.
Michigan House Bill 6075 was the only piece of a 13-bill retiree healthcare reform package introduced by House Republicans during the December lame duck session to reach the governor's desk.
Snyder signed the bill Thursday.
Lawmakers said they needed more time and information to work on the other parts of the reform package.
The other components of the package are expected to be reintroduced as when the new legislative term begins on Jan. 11.
"Many people, including leaders in both chambers and the governor, have indicated a willingness to continue work on this issue, so something that addresses this should come up soon," said Gideon D'Assandro, spokesman for the majority House Republicans. "But nothing can be officially introduced until tomorrow."
The bill that passed was sponsored by state Rep. Dan Lauwers, R-Brockway Township.
Supporters say it is a transparency measure that strengthens requirements on local governments to report their pension and retiree health care costs to the state.
Any municipality below 60% funding will have to report what steps, if any, it is taking to reduce unfunded liabilities and to develop and publicly share a plan to pay off their outstanding debt .
"This bill makes our local governments accountable to the people they serve and will prevent them from falling into this sort of financial crisis in the future," said Rep. Lee Chatfield, R-Levering, in a press release.
Chatfield chairs the House Local Government Committee.
"This is an important reform on its own, and it is a great start to solving the OPEB debt crisis facing our municipalities," he said.
Michigan's legislative lame duck session ended in December without resolving the rest of its debate over a fix for local governments' underfunded pension liabilities.
The remainder of the 13-bill package was aimed, supporters said, at reining in unfunded liabilities in communities that have extended more benefits to employees than they can afford.
The bills sought to impose restrictions on local governments with retiree health costs that are less than 80% funded.
The changes would have applied to any government entity that started at or above the 80% benchmark, but fell below that 80% funding level and remained below the benchmark for two consecutive years.
It would have affected current employees and retirees.
New employees hired after April 30, 2017 would have been excluded from retiree health care coverage. Instead, a local unit of government would have been permitted to contribute up to 2% of an employee's pay to a tax-deferred Health Savings Account that could be used at retirement.
"OPEB is now consuming a significant portion of current budget expenses for local government," Deputy State Treasurer Eric Scorsone said in a December Treasury report.
