Note: Parts of the following have been published here previously.
We are no longer entitled to information on pensions of individual public employees. That has been the case since the end of March, but the reality was brought home to me yesterday when my FOIA request for former Lansing police chief Teresa Szymanski's pension calculation sheet was denied. The basis given for the denial is MCL 15.243(1)(d) and 2012 PA 347. MCL 15.243(1) is the section of the Freedom of Information Act that lists the circumstances in which a public body may exempt a public record from disclosure, and (d) is "Records or information specifically described and exempted from disclosure by statute." Public Act 347 of 2012 is that statute. Section 20h(3) of the Act says
The exemption was part of Senate Bill 797, an amendment to the Public Employee Retirement System Act. The bill passed in November and was signed by Governor Snyder on December 5. The timing is suspicious. Public employee unions are feeling the heat, and apparently have plenty of friends in both parties in the state legislature.
State and local governments all over the country are faced with with public employee pension systems they cannot afford, and Lansing is no exception. According to the Report of the Lansing Financial Health Team (page 41), the City of Lansing has an unfunded long-term liability of nearly $650 million. $218 million of it is for pensions and $431 is for "other post-employment benefits" - primarily, health insurance. According to the Lansing City Pulse (3/27/2013), former mayor and Financial Health Team member David Hollister believes that if left unaddressed, these unfunded long-term liabilities could lead to bankruptcy or appointment of a emergency financial manager, and it could happen in 3-5 years.
The reason we need to see actual pension calculations is that pensions are complicated. Typically, they are calculated by multiplying these 3 factors together:
Years of service is usually pretty obvious if you have the hire date and termination date.
The multiplier or "pension factor" is usually available on the employer's website. For state employees and teachers, it is 1.5%. For state police, it is 2.4%. For Lansing's police and firefighters, it is 3.2%. For other City of Lansing employees, it varies between 2.3% and 2.8%, depending on the employee group.
The mysterious one is FAC. An employee's salary is not so easy to obtain, and salary isn't all that goes into FAC. For example, FAC for a Lansing policeman includes the following:
In the collective bargaining process, unions push the employer to include anything that remotely resembles compensation, because the higher the FAC, the higher the pension. And to further increase that "final" average, individual employees do all they can to delay payments until those last 2 or 3 years before retirement. They let their sick leave accumulate, get as much overtime as possible, and so on. For 24 Lansing police whose pension details I obtained before the new law was passed, FAC exceeded salary by an average of $11,573. For 3 of them (highlighted), FAC was so high that their pensions exceed their salaries. And this was with only 25 years of service.
Pensions and other post-employment benefits are a wonderful way to conceal excessive compensation. Over the last two years, I've collected a lot of information on the City's pension systems: