{"id":8573,"date":"2022-03-01T21:45:08","date_gmt":"2022-03-02T01:45:08","guid":{"rendered":"http:\/\/blogs.mml.org\/wp\/inside208\/?p=8573"},"modified":"2022-03-01T21:45:08","modified_gmt":"2022-03-02T01:45:08","slug":"house-passes-1-15b-municipal-pension-debt-relief-grant-program","status":"publish","type":"post","link":"https:\/\/mml.org\/inside208\/2022\/03\/01\/house-passes-1-15b-municipal-pension-debt-relief-grant-program\/","title":{"rendered":"House Passes $1.15B Municipal Pension Debt Relief Grant Program"},"content":{"rendered":"<p>By a vote of 71-33 the House of Representative passed <a href=\"http:\/\/www.legislature.mi.gov\/(S(5nqa5on1pzrcab4nqyf1ades))\/mileg.aspx?page=getObject&amp;objectName=2021-HB-5054\">HB 5054<\/a> that would provide $1.15B in state general fund resources will be utilized to provide direct assistance to municipalities to help pay down municipal pension debt.\u00a0 There will be two parts to the grant program, $900M will be utilized to get all pensions that are less than 60% funded up to 60% funded, and $250M will be provided to pensions that are 60% funded or greater.<\/p>\n<p>The legislation first saw action last Thursday in House Appropriations committee. <a href=\"\/inside208\/2022\/02\/24\/house-proposal-provides-direct-resources-to-address-municipal-pension-debt\/\">Click here<\/a> to view our blog on the introduction and details of the bill.\u00a0 Since committee action, the bill has seen a few changes and those are highlighted in the lists below. This bill now heads to the Senate and we will be working closely with them to secure passage of this legislation.<\/p>\n<p><strong><u>Changes to House Bill 5054 Include:<\/u><\/strong><\/p>\n<ul>\n<li>Further defines that the most recent mortality tables may also be adjusted based on experience studies as well.<\/li>\n<li>Require retirement systems to comply with Uniform Actuarial Assumptions within 5 years of receiving the grant funds rather than immediately.<\/li>\n<li>Clarifies that benefit enhancements must be 100% pre-funded and that increases to wages and salaries are not considered a benefit enhancement. The update also removes the 10-year cap to benefit enhancements.<\/li>\n<li>Clarifies that the grant funds available to pension systems above 60% funded can use the grant funds for pre-funding retiree health care benefits.<\/li>\n<li>Clarified how any excess grants funds can be distributed to pension system below 60% funded.\u00a0 If by August 31<sup>st<\/sup> there are still funds remaining, then the cap to an individual local unit does not apply when funds are redistributed.<\/li>\n<li>Other technical changes include:\n<ul>\n<li>Changing \u201cqualified retirement system\u201d to \u201cqualified retirement systems\u201d to address plans that have more than one retirement system.<\/li>\n<li>Change the \u201cas of December 31, 2021\u201d date to \u201cthe most recent fiscal year ending on or before December 31, 2021\u201d to address systems that are on a fiscal year basis.<\/li>\n<li>Clarifies that the City of Flint can stay on its current pension amortization schedule.<\/li>\n<li>Defines what Retiree Healthcare pre-funding means.<\/li>\n<li>Clarifies in the definition of a \u201cQualified Retirement System\u201d that the funded ratio only applies to pension funds.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>We continue to strongly believe this is a significant step forward and a direct reflection of our efforts over the years highlighting the need to address our municipal finance system.<\/p>\n<p>To view our statement on the passage of this bill <a href=\"https:\/\/www.mml.org\/newsroom\/press_releases\/3-1-2022-mml-applauds-house-approval-pension-investment-bill.html\">click here<\/a>.<\/p>\n<p>We will continue to share more information about potential action on this bill in the Senate as it becomes available.<\/p>\n<p><em>John LaMacchia is the League\u2019s director of state &amp; federal affairs. He can be reached at jlamacchia@mml.org or 517-908-0303.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By a vote of 71-33 the House of Representative passed HB 5054 that would provide $1.15B in state general fund resources will be utilized to provide direct assistance to municipalities to help pay down municipal pension debt.\u00a0 There will be two parts to the grant program, $900M will be utilized  [&#8230;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-8573","post","type-post","status-publish","format-standard","hentry","category-uncategorized","mml-onemagnify-plugin"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - 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