By James M. Hohman | Mackinac Center
In order to return Michigan’s school employee pension system back to full funding, it is necessary to continue to pay the system’s annual required contributions.
The ARC is the amount necessary to pay for the pensions that employees earn and to catch up on unfunded liabilities under the state’s assumptions. The state has not been paying the full amounts.
The ARC last fiscal year was $1.9 billion and the state only put in $1.4 billion.
This has been a long-term problem. The state only paid its full ARC in two of the past 10 years.