Health of Wayne County pension fund improves
The financial health of Wayne County’s pension system is improving, officials say.
The Wayne County Employees Retirement System is 54 percent funded, according to an actuarial valuation by Gabriel Roeder Smith & Co. That’s up from 44 percent two years ago.
Wayne County officials say the increase is tied to Wayne County Executive Warren Evans’ Recovery Plan, which reduced accrued liabilities by $120 million. He also eliminated an inflation equity fund and transferred those assets to the pension system.
“We are making critical headway in strengthening the County’s pension system,” Evans said in a statement. “We made some tough decisions to get us to this point and I am pleased to see that our solutions are resulting in a pension system that will make it extremely more likely that retirees will continue to receive the pension checks to which they are entitled.
“We will continue to do the work necessary to ensure our pension system is healthy and sustainable.”
In a July 1 letter to the pension board, the firm said the valuation was conducted Sept. 30, 2015, to measure the system’s funding progress and determine the county’s contribution rates for the fiscal year beginning Oct. 1.
The report shows Wayne County’s pension funds have a assets of $740 million, an increase of $67.9 million since Evans took office, officials said.
Prior to implementation of the Recovery Plan, the county was facing an annual $52 million structural deficit and an accumulated deficit of $82 million. It also had $1.3 billion in unfunded healthcare costs and the pension system was only funded at 44 percent of the present value of its future liabilities. To be fully funded, an additional $841 million was needed, officials said.
The county has since eliminated its deficits and restructured healthcare to shed more than $800 million in unfunded obligations.
“Without restoring the county’s fiscal health, none of the progress we’ve made in restoring and improving county services would have been possible, including our plan to finish the partially built jail on Gratiot,” Evans added.
The improved pension plan funding comes after Moody’s recently upgraded the county’s outlook to “stable,” and Standard & Poor’s issued a “positive” fiscal outlook. Fitch Ratings has also upgraded the county’s bond rating from “B” to “BB+.”
Evans released the county’s 2016-17 and 2017-18 fiscal budgets last week with projected surpluses of $10.5 million and $3.5 million, respectively.