Reforms help secure benefits for retired Michigan teachers
(This opinion article was distributed to local media in the 18th Michigan Senate District in March of 2026)
We live in an era of poorly managed government finances, especially items with long-term repercussions. The national debt is so high it seems more theoretical than realistic that it will be paid off — at least in our lifetime. But every once in a while, there’s a bright spot amid this darkness worth highlighting.
In 2018, I sponsored reforms to Michigan’s public school retirement system that were approved by the Legislature. Eight years later, I am happy to report the reforms are working, and the results speak for themselves.
The system’s finances had been worsening for quite some time. In 2017, the pension fund was $30.7 billion in debt and 62% funded. The retiree health care fund was not any better, with $8.1 billion in debt and only 43% funded.
To start climbing out of this hole, the state Legislature adopted two technical but significant changes. The first was a floor funding requirement I championed in the 2017 pension plan overhaul. This provision simply meant the state could no longer reduce its debt payment from one year to the next, forcing policymakers to stay on schedule instead of passing along costs and making the situation even worse in future years.
The second provision was a multiyear, phased transition of the debt structure to a level-dollar methodology. Instead of basing debt payments on a payroll growth assumption that was chronically wrong and led to underpayment, we shifted to a predictable approach along the lines of a fixed-rate mortgage. The Office of Retirement Services has confirmed to my office that the phased-in level-dollar plan is now complete.
We’re seeing positive results, which is a win for both public school retirees and taxpayers. According to the most recent available numbers from September 2025, the pension system has paid down $10.8 billion in debt and is 80% funded. We’re now on track to have the debt fully paid off in 2035, three years ahead of schedule. Even better, the retiree health care fund now has no debt and has more than enough funding to meet its obligations.
Now, with eight years of hindsight, it is fair to say this auspicious plan is working — although it was a bumpy ride getting to this point.
In 2019 and 2020, Gov. Gretchen Whitmer and her bureaucrats used gimmicks to avoid reducing the payroll growth assumption to levels envisioned in the 2018 law. I later became chair of the House Appropriations Committee and had to use the leverage of that position to demand that the governor sign a revised law to reach these goals as part of a broader budget agreement.
In 2024, Democrats inexplicably reinterpreted the floor funding requirement to mean two different floors — one for the pension system and another for retiree health care. This effectively diverted $600 million annually from the retirement system, slowing down what I still consider significant progress.
As lawmakers in Michigan craft budgets this cycle and in the future, it is imperative they resist short-sighted temptations to free up cash by deferring payments to later years. Fully paying off our debt over the next nine years is achievable and will save taxpayer money in the long run. We can get to the finish line by staying disciplined.
Public school employees deserve to know the benefits they’ve earned are safe, and taxpayer money should go where it can do the most good — improving student outcomes rather than paying off debt incurred decades ago.
State Sen. Thomas Albert represents the 18th District, which includes Barry County and portions of Allegan, Calhoun, Kalamazoo, Kent and Ionia counties.