Detroit Schools 'Misplace' $30 Million from Feds for Pensions

The Detroit News reported this week that the U.S. Department of Education allegedly gave Detroit Public Schools $30 million to help it pay required contributions to an employee pension fund, but the school district never sent the money into the state-run system. The $30 million was supposed to cover pension contributions for DPS employees whose pay came from federal grants.

ForTheRecord says: For a clear example of how the rising cost of maintaining a defined benefit pension system is strangling school budgets, one need look no further than the Detroit school district. Employment has been cut in half, from 15,465 full-time employees (FTEs) in 2007-08 to 7,280 in 2014-15. (Enrollment fell an equivalent amount.)

Despite the decline, the district paid 65 percent more per employee for required pension contributions in 2014-15, or $13,527 per full-time employee. In 2007-08, the total cost for half as many employees was $126.5 million, or $8,181 per FTE.