The City of Muskegon maintains a defined benefit pension program for employees hired before 2006. This program is administered on the City’s behalf by the Municipal Employees Retirement System (MERS) of Michigan.
Funding the defined benefit pension program is one of the largest expenditures in the City’s annual budget. Also, the liability associated with the promise to pay pensions for decades into the future is one of the City’s largest long-term financial commitments. Because of these high costs and liabilities, the City has closed the defined benefit program to new hires. Employees hired since 2006 have a separate defined contribution retirement program for which there is no annual actuarial valuation.
Each year the City has an actuarial valuation done, which assesses the financial condition of the City’s defined benefit retirement system. Following are links to the most recent annual valuation reports:
The City also provides healthcare benefits to its retirees that entail long-term liabilities. These are referred to as “other post-employment benefits” (OPEB). An actuarial valuation of the retiree health program is performed every two years:
This article provides more information about the City’s pension and other legacy costs.