Bloomfield Township, a suburban Detroit community, just made important strides that the state has refused to make: it cut back on retiree health care benefits to new members. And it did it through union negotiations.
New employees in the township will be offered some benefits to cover the costs of their health care when they retire -- the township puts $2,500 a year into an employee's Health Savings Account and an employee contributes 1 percent of their gross pay. This eliminates the township's open-ended promises for employer-paid coverage upon retirement.
The township had already closed off its pension system to new members in 2005 and instead offered new members participation in a defined-contribution retirement system. The two moves together will eventually eliminate the township's ability to kick retirement benefits down the road.
Read more in Michigan Capitol Confidential.
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