2020 Township Valuation Reports Show Significant Debt Payments Are Paying Off
MERIDIAN TOWNSHIP - The Township Board heard the 2020 valuation reports for the MERS Health care and Township Pension fund during Tuesday’s virtual meeting.
In past years, the Township was $4 million under in funding for retiree health care, but now the Township is 100% funded.
“Today we are 100% funded by our aggressive approach over the last 6 to 8 years we have paid off all our retiree health care debt,’’ said Frank Walsh.
The Board is hoping to continue paying off debt from the passed Meridian Employee Pension plan that doesn’t include any current active employees in the Township.
A contribution of 2.9% is required from the Township by MERS but Meridian plans to pay $5.2 million which is $3 million over MERS required percentage
“We are forecasting only a 5.3% rate of return so that’s why we’re paying so much more in the ARC,” said Walsh. “We’re not looking at it as such a rosy picture.”
The Municipal Employee Retirement System of Michigan’s Pension System covers 105 Meridian Township employees with 73 or 74 of those employees from the police or fire department.
Other post-employment benefits liability for the Township was costing the Township $4 million but now, due to the Township's aggressive payment approach, the cost is $18,461.
Since paying down the debt brought on by the legacy pension plan, the Township can afford to take out the 5.35 % rate of return with hopes of eliminating all previous debts from the legacy pension plan.