New policies for making contributions to the pension and retiree health care plan have been adopted by the Ann Arbor city council. The new polices are intended to ensure that the plans are eventually fully funded.
The policy would set the funding at the higher of two different figures: (1) the Actuarial Required Contribution (ARC) rate; or (2) the existing level of contributions adjusted for the change in general fund revenues. That would have an impact of establishing a minimum increase in funding of 2% per year.
Action came at the council’s May 19, 2014 meeting.
The operative language in the policy is:
If the General Fund revenues are projected to increase less than 2%, the city’s contribution shall increase 2%; thereby establishing a minimum increase of 2% per year.
The pension plan is currently 80.24% funded. The VEBA plan is 38.5% funded.
This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.