Ann Arbor voters favor changes to city pension board composition
Read Washtenaw County election results here.
Ann Arbor voters came out in favor of Proposal 3 on Tuesday's ballot, changing the makeup of the city's pension board, including removal of the city administrator.
With all precincts reporting, the proposal passed 7,977 to 3,729 (68.1 percent).
Governance of the city's retirement system is defined by the city charter and changing its composition requires voter approval of a city charter amendment.
At the heart of the concern was the independence of the board members. Of the nine current members, a majority are direct beneficiaries of the retirement system.
With the passage of Proposal 3, the board's makeup has been changed to include five appointed citizen trustees, one trustee elected by fire members, one trustee elected by police members, one trustee elected by general city members, and the chief financial officer. The general members are elected by a vote of active employees who are not in police or fire.
Previously, the board's composition included the city administrator, chief financial officer, three trustees appointed by the Ann Arbor City Council, two trustees elected by general city members, one trustee elected by fire members and one trustee elected by police members.
As of June 30, the city's pension system was 88 percent funded, compared to being 90.3 percent funded the year before and 126.8 percent funded in 2002.
The city's unfunded pension liability has grown to $57.6 million, up from $45.5 million a year ago — and significantly up from $1.7 million in 2008. City officials are hoping recent changes to retiree benefits will help the city chip away at that obligation.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
Jack
Wed, Nov 9, 2011 : 7:20 p.m.
"Of the nine current members, a majority are direct beneficiaries of the retirement system." And the problem with that is? Who better to be concerned about the health of the pension system than the beneficiaries. The Ann Arbor News and now annarbor.com have quite consistently campaigned against pension and other benefits for city employees. This is no exception. Without its help, this highly political proposal may not have passed. So now we have the mayor and council appointing members to the pension board. A mayor and council who have previously suggested that they, too, receive these benefits. The pension system is in deficit mode not because of its current board membership composition, but because the City, the body that is now going to appoint members of the board, decided to give everyone eligible a hugh buyout. There was a massive exodus of employees from the city (somewhere around 150, way over the City's estimate) that put a very large burden on the system, not only due to the large number, but because these retirees were given pensions over that they would normally receive. This was the City,not the Pension Board. That, combined with a troubled economy, caused the fund to no longer be funded at 100%. Previous to that, the pension system was overfunded. The City was not only not making any contributions to it, the Fund was also paying for retiree health benefits. With the exodus and poor economy, that changed. And the City was dying to get its hands on that money. Now, with the new "disinterested" and "balanced" board, appointed by politicians, perhaps they will be able to do so. Let the fun begin.