The Hancock City Council opened its meeting Wednesday night talking about a concerning letter from a money manager that will affect a small number of municipal employees. The Central States Pension Fund was begun in the 1950’s to oversee the obligations of the Teamsters union. Some Department of Public Works staff are members. The fund has been classified as “critical and declining.” Councilor Kurt Rickard says the details of the letter are shocking.
A portion of the most recent stimulus bill is devoted to bailing out failing pension funds. Central States says it is not yet clear how much help that will be given the staggering $47 billion deficit that currently exists. Because the pension was negotiated among union members outside of the city system, Hancock has no obligation to assist. A vast majority of Hancock workers are covered by the Michigan Employees Retirement System, otherwise known as MERS.
Keweenaw Report reached out to City of Houghton manager Eric Waara to see if there was a similar arrangement for DPW staff there. He said everyone’s plan was converted to MERS over a decade ago. Waara says Houghton’s fund is well over 80 percent covered, which is considered excellent. That means current assets can cover nearly all expected future liabilities related to retirement.