Grand Traverse County moves MERS surplus to lower pension costs and seed Project Alpha

The Grand Traverse County Board of Commissioners voted to shift pension and surplus funds in a pair of decisions intended to smooth future employer contributions and to seed a down payment for a large capital effort known as Project Alpha.

The board approved a staff recommendation to transfer $1,250,000 from the MERS surplus division into underfunded divisions within the county’s MERS retirement plan to reduce the expected ‘ballooning’ employer contribution in coming years. Chris Forsyth, deputy county administrator, framed the transfer as a measured approach after walking the board through three actuarial scenarios based on the 2024 MERS valuation.

Why it matters: Forsyth said that using surplus funds in a stepped approach would reduce the size of the county’s future required payments while preserving a separate pension stabilization fund for market downturns. “We’ve put together three scenarios,” Forsyth said, describing a conservative market‑value approach that shows sensible funded‑ratio improvements while moderating risk. He noted the county’s pension stabilization fund was about $4.55 million year‑to‑date and the surplus division held roughly $3.4 million at the end of last year.

Board members pressed staff on assumptions and tradeoffs. One commissioner questioned whether the county should invest surplus funds more aggressively to chase higher returns; Forsyth warned that large short‑term market drops had produced notable losses in recent years and advocated a measured transfer strategy. “There is a risk,” Forsyth said, noting some investments are about 40–45% equities and therefore vulnerable if markets decline.

Separately, the board voted to suspend the county’s fund‑balance policy for 2025 and to transfer 2024 surplus funds into a dedicated Project Alpha account. Administration recommended placing $5,571,000 of 2024 excess funds into the Project Alpha fund; the motion to suspend the policy and move the funds was approved by the board.

What was decided: The $1.25 million transfer within MERS was approved by motion and voice vote. The suspension of fund‑balance policy and the allocation of $5,571,000 to Project Alpha were also approved by voice vote after clarification about the exact 2024 surplus amount to be transferred.

What’s next: Administration said staff will include these items in the December 17 budget appropriations resolution and will continue to monitor market performance and return to the board with options—potentially accelerating additional transfers in favorable years or pausing if markets turn. The board retained discretion to revisit the pension stabilization fund and to apply additional surplus funds later if warranted.