City of Ishpeming awarded more than $1.7M to help fund its Municipal Employees’ Retirement System
September 20, 2023
The Michigan Department of Treasury grant will bring Ishpeming’s retirement system to nearly fully funded
Ishpeming, Mich., Sept. 20, 2023 – To assist in funding the City of Ishpeming’s municipal pension system, they applied for, and received a grant in the amount of $1,776,032 through the Michigan Department of Treasury’s (Treasury) Protecting MI Grant Program. The awarded money will be applied to a surplus division (SG) in Ishpeming’s Municipal Employees’ Retirement System (MERS), an independent, professional retirement services company that was created to administer the retirement plans for Michigan’s local units of government on a not-for-profit basis.
Earlier this year, under the Fiscal Year 2022-23 budget, Public Act 166 of 2022, Section 979a, the Michigan Treasury appropriated $750 million to establish and operate a local unit municipal pension principal payment grant program for qualified retirement systems with a funded ratio below 60 percent. Parameters of the funding eligibility allowed for retroactive payments; as of the City’s Dec. 31, 2021 financial statement audit report, Ishpeming’s MERS was 50.3 percent funded, which is below the 60 percent ratio, as defined in the Protecting Local Government Retirement and Benefits Act (Public Act 202 of 2017).
“We are truly committed to our current and former employees, and once the audit revealed our system was underfunded, we knew we had to take care of the City of Ishpeming retirees, who served this community and its residents, so they can have a secure retirement,” said Craig Cugini, city manager of Ishpeming. “The first step in turning things around included bonding our pension with taxable bonds to help fund the program, bringing us to 95 percent in MERS funding, which set us apart from other municipalities facing a similar situation. And then when the Michigan Treasury grant became available, we recognized the funding opportunity as yet another way to ensure our former and current employees are taken care of.”
“Ishpeming took control of a situation that many municipalities were facing several years ago, with market fluctuations causing severe drops in pension fund levels across the country,” said State Rep. Jenn Hill (D-Marquette). “The early step to bond the pension, starting in 2021 and concluding in 2022, shows the city’s commitment to its retired public service members. The additional funding secured once available through the state in 2023 shows its strategic know-how in navigating resources for its community.”
In 2017, when the City of Ishpeming was identified as having an underfunded pension system status, per the Public Act 202 of 2017, they were required to create a MERS Corrective Action Plan, which includes the development and implementation of corrective options for the local unit of government to address underfunded status. To view the corrective action plan and the monitoring update, visit Ishpeming’s website.
To learn more about the Michigan Department of Treasury’s (Treasury) Protecting MI Pension Grant Program, please visit the Department of Treasury site.
The City of Ishpeming is located in Marquette County in the Upper Peninsula of Michigan and is home to about 6,600 residents. Boasting a rich mining heritage, creative small businesses, dozens of miles of trails and many outdoor amenities, and a community-centric culture, Ishpeming is a wonderful place to live, work, and play. During 2023, Ishpeming is proud to celebrate its sesquicentennial birthday, honoring the past 150 years and looking ahead to a bright future. To learn more about Ishpeming, visit https://ishpemingcity.org/.