State Representative Jim Lilly today offered votes of support for House bills prioritizing and safeguarding retirement benefits for police, firefighters and other local government employees.
“Police officers and firefighters serve their communities and protect their neighbors every day they are on the job. We need to make sure they are protected in terms of retirement and health care benefits,” said Lilly, of Park Township. “This is not a plan designed to put the state in control of benefits. It’s a plan to help safeguard benefits.”
The new proposal provides an initial detection system using transparency and proper reporting from local governments each year to identify ones at financial risk due to underfunded retirement plans. The need for greater reporting and data collection from local governments follows specific recommendations outlined by a task force assembled by Gov. Rick Snyder.
Communities will be examined annually through a fiscal evaluation and municipalities failing to meet recommended criteria to alleviate their debts will be identified as underfunded. Local governments will be tasked with rectifying their unique funding concerns.
“Due to sound financial management, I am pleased communities within the 89th district have been making sufficient payments into benefit plans. But that’s not the case elsewhere in the state,” said Lilly. “If communities go bankrupt, that is a burden the whole state will endure and police and fire retirees in affected areas could lose some or all of their benefits at the hands of a federal bankruptcy judge. We don’t want it to get that far. We want to make sure locals have the information and research needed to solve issues.”
The bill mandates a minimum level of pre-funding for new hires to ensure every local unit has a start in funding municipal retirement plans. As the committee’s vice chair, Lilly helped advance House Bill 5298 through the House Michigan Competitiveness Committee on Tuesday.
“These proposals offer the tools to help communities start toward better plan funding,” said Lilly. It’s a plan that cultivates a healthy financial future with stronger Michigan communities.”
House Bill 5298 and companion bills move to the Senate for further consideration.