LANSING, Mich. (Michigan News Source) – Years of underfunding the Michigan public schools employees’ pension system has led to a huge financial drain on taxpayers to make up for what was a $35.1 billion gap – known as an unfunded liability. That’s the difference between what the state had promised retirees and what money it had set aside to pay for those benefits.

The state has tried to make up for the years of underfunding by making school districts double down on payments. For example, Ann Arbor Public Schools’ contribution to the public-school pension system known as MPSERS was $69.8 million in 2023, up from the $13.2 million it contributed in 2011.

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Michigan’s Legislature tried to reform MPSERS numerous times, financially shutting down the most popular and severely underfunded plan called Pension Plus to new employees in 2017. Instead, a new similar pension system was created with safeguards in place to prevent the underfunding of the past.

However, now the Michigan Education Association (MEA) teachers union is lobbying to have House Bill 6060 passed during the lame duck session that would allow school employees back into the underfunded Pensions Plus system.

The state Legislature tried reform efforts in 2010 and 2012 before closing the most popular MPSERS plan in 2017. In 2018, the unfunded liability marked $30.8 billion. It has grown to $35.1 billion in 2023 despite the reform efforts.

The Michigan Education Association will be hosting a Lobby Day on Wednesday at the Capitol Building to gain support to allow public school employees back on the Pension Plus retirement plan.