New police contract ends lifetime health benefits for new hires

WEDNESDAY, Oct. 30 —The Lansing City Council has ratified a new three-year contract with the Capitol City Labor Program that covers both union and supervisory officers, other than the chief of police. 

Labor representatives gave up reductions in future retiree health benefits in exchange for three modest increases in wages. 

“New hires will be going into a healthcare savings account when they retire,” explained Councilman Peter Spadafore. “That really helped to change the trajectory of the unfunded liabilities.” 

Current employees who retire after July 2020 will also be given whatever healthcare plan active employees at Lansing are getting rather than be locked into an obsolete plan as many current retirees are. 

“They have a very good health plan right now,” said Tom Krug, the executive director of the Capitol City Labor Program. 

The agreement did not include any hard numbers on savings, but a December 2017 report from the city’s financial health team recommended reining in retiree health costs. Lansing has about 2.3 retirees for every active employee, and most of them get lifetime health benefits along with a pension. About 22% of the city’s general fund budget goes toward addressing these unfunded liabilities, which total more than $700 million. 

“I am thrilled that the City of Lansing and our police officers have come to an agreement that shows financial appreciation for our law enforcement while also assisting the City in addressing future unfunded liabilities and legacy costs,” Mayor Andy Schor said in a statement. “These are both critical for Lansing’s future.” 

In August, Schor had announced that members of his immediate staff and new non-bargaining city employees would no longer receive a pension and would instead get a defined contribution plan such as a 401(k) plan that has become more common in the private sector.  

The new police contract does not affect pensions, nor does it tamper with active duty police health benefits. 

Officers will get an immediate 3% pay hike, retroactive to July 16, when the last contract ended. Next July, they’ll get another 3% across-the-board raise, followed by a 2.25% increase in July 2021. The contract expires July 15, 2022. The police had been working without a contract for more than three months. 

“They’re keeping wages competitive to other communities in the area,” Krug said. He said the salaries are comparable both to nearby departments such as East Lansing and Meridian Township and other large Michigan cities like Grand Rapids and Kalamazoo. 

Schor said the city has 202 police officers and while there is no immediate money to hire more officers, the city is actively trying to replace officers as soon as they know they are leaving or retiring.