Gladstone OKs new retiree benefits plan
GLADSTONE — After months of Gladstone retirees voicing their concerns and frustrations about post-retirement health benefits being cut, the Gladstone City Commission unanimously voted to submit an amended PA 202 corrective action plan to the state during a special meeting Monday.
The new plan, if approved by the Michigan Department of Treasury, would still cut benefits for the retirees. It does provide each retiree with three options and a city-sponsored Medicare supplement program for Medicare eligible retirees.
“Each person on here is eligible for doing … any of these options. So it isn’t an all or nothing,” said City Commissioner Brad Mantela on the amended plan.
In December 2017, the Michigan Legislature passed Public Act 202, also known as the “Protecting Local Government Retirement and Benefits Act.” The law requires all local municipal governments in Michigan to report to the state treasurer the status of pension systems and retiree health insurance benefits.
PA 202 requires a minimum 60 percent funding level standard for pension systems and retiree health benefits to be 40 percent funded. Gladstone’s pension system was not in compliance with the requirements, so the city had to create a corrective action plan.
City commissioners decided the best course of action was to make changes to post-employment benefits.
Changes include ending all lifetime Medicare supplement benefits, which affected two retirees, and all other retirees will receive a stipend placed into a Medical Savings Account (MSA) of $602.01 monthly or $7,224.12 yearly for up to 10 years or until age 65.
City commissioners approved the plan and submitted it to the state. The plan was reviewed by the Michigan Treasury Municipal Stability Board and accepted.
When the retirees were made aware of the changes to take into effect on April 1, there were many questions about its legality and if the city could undo or amend the decision.
Retirees expressed frustration at different city commission meetings leading up to the decision to amend the plan.
The options for retirees included in the new plan are to stay with the current plan of $602.01 a month for the remaining months of the retirees’ term, an MSA buyout of 90 cents to the dollar in a lump sum, or a cash buyout of 70 cents to the dollar.
The motion approved included checking the accuracy of the years of service for each retiree before submitting the amended plan — as inaccuracies were pointed out.
Once the amended plan is submitted, it will be reviewed by the Michigan Treasury Municipal Stability Board and either accepted or rejected.