Lansing is dealing with $247 million in unfunded healthcare liability for its retired workers, according to an actuary hired by the city.
That's an improvement over previous years.
"This is pretty typical for cities not to have all the money upfront to fund future retirements,” said the city’s Chief Strategy Officer Judy Kehler.
It was Kehler’s idea to hire the actuary, Boomershine Consulting. She said it was important for Lansing to know exactly how much money they need to pay each year to make sure all retired workers get the benefits they're entitled to.
“He has helped cities in ways to where they have reduced their unfunded liability and to creatively look at ways to make this work,” she said.
The city has been dealing with unfunded healthcare liabilities for years now.
A report from the city showed in 2020, Lansing was dealing over $560 million in unfunded health care liabilities, and, in 2019, the city had more in $430 million.
Those figures are calculated differently from the ones Boomershine Consulting will provide.
Kehler said she wants the community to know that the city isn’t behind, but they’re just on a pay-as-you-go method until the full unfunded liability is paid off.
“Paying what is due every month, will be able to help the city pay off the liability in a timely matter that best for Lansing,” she said.
The city is in the process of phasing out its retiree health care system.
Kehler said new employees will receive a healthcare savings plan, which is a reimbursement account funded by the city.