Michigan School Pensions Still Underwater, Democrat's Bill Would Sink Them Lower

Like every Michigan public school district, the Detroit Public Schools Community District is struggling with rising pension expenses caused by decades of state officials underfunding the pension system.

In 2016-17, the district had to contribute $76.5 million to the state-run pension fund for public school employees. Just three years later, the required contribution was up to $108.0 million, a 41% increase.

Despite several efforts to reform the Michigan Public School Employees Retirement System over the years, the pension fund was still $33.8 billion short of the amount needed to meet its pension promises. That amount is about twice the annual revenue of the entire state K-12 public school system this year.

The pension fund has been underfunded 46 of the last 47 years.

And over last two years, the state has fallen short of contributing what its actuaries have determined is needed for it to catch up. In the last 10 years, the state has matched that required annual payment two times.

The shortfall could grow larger under legislation introduced by state Sen. Curtis Hertel Jr., D-East Lansing. Senate Bill 418, introduced on May 5, would benefit public school employees who were hired before February 2016 and worked during the pandemic. It would give them two years of service credit for each year they work during a declared emergency, such as a pandemic. The bill is unlikely to advance in the Republican-controlled Legislature.