Pension health plans set to change

Sunday Times Newspapers

LINCOLN PARK — A long-anticipated change in health care coverage for about 300 city pensioners will soon take effect.

City Council last week took no action on a proposal that had been submitted by Emergency Manager Brad Coulter, which was then forwarded to the state treasury department for final approval.

Coulter said that replacing the current health care packages provided to retired city employees with a monthly stipend to partially subsidize group coverage should be ready to begin June 1. The proposal – part of the city’s overall debt-elimination and stabilization plan – allows a continuation of the existing pension system.

“This is a long-term fix, and we need to do it right,” Coulter said.

He expected a 60-day window to implement the changeover. As outlined the plan hopes to restore pension funding to 60 percent by 2035; currently the system is only 22 percent funded, a shortfall that was among the primary contributors to the city’s having been declared to be in financial distress.

Left unchanged, projections were of a continued decline in pension funding that would likely end in default, under which scenario said the taxpayers would still be responsible for the costs, likely through a state-imposed tax.

Under state emergency manager guidelines, council had three options last week when reviewing Coulter’s proposal: approval; rejection, which provides 10-days to present an alternate plan; or no action, which results in approval.

Coulter said the plan will save the city an estimated $500,000 annually, to be applied to general operations as the city chips away at a deficit that had approached $5 million.

(James Mitchell can be reached at