Pension Matters

State Employees Retirement Fund
Most Recent Market Value | Michigan Treasury Bureau of Investments

December 2017

A Good Year for Hedge Funds

Each of the 20 hedge fund portfolios of 17 U.S. state pension plans analyzed by Pensions & Investments produced positive returns in the fiscal year ended June 30, a sharp contrast to the year earlier, when 90% of the portfolios were in the red. portfolio returns of large U.S. public pension funds staged a dramatic comeback in the year ended June 30, reversing a two-year downward slide. One of those systems doing well was Michigan’s pension system with a rate of return of 6.8%. Read the full report at

How’s Social Security Funded, you ask?

The smallest component is the taxation of benefits, which provided $32.8 billion of the $957.5 billion collected in 2016. Individuals making more than $25,000 annually, and couples earning more than $32,000, who are receiving Social Security benefits may be subject to having a portion of their benefits taxed by the federal government.

Second, interest income earned on the Trust’s $2.89 trillion in asset reserves came to $88.4 billion last year. Nearly all of Social Security’s assets are invested in special-issue bonds, and to a lesser extent certificates of indebtedness. As of Sept. 2017, the weighted yield on these bonds and certificates of indebtedness was 2.9%.

The most important component for Social Security is its payroll tax of 12.4% on earned income. Payroll tax accounted for 87.3% of the $957.5 billion the program collected in 2016. In 2018, earned income between $0.01 and $128,700 will be subject to Social Security’s payroll tax, with earned income above and beyond this amount excluded from it. It’s worth pointing out that most workers aren’t exposed to the full brunt of this 12.4% payroll tax. If you’re employed by someone else, your employer covers half of your obligation (6.2%), with the worker responsible for the remainder (6.2%). The self-employed, though, are stuck with the full 12.4%.

The fact that the payroll tax exists, and that it’s collected on the earned income of working Americans, ensures that the program can never go bankrupt. In other words, Social Security will always collect revenue to distribute to eligible beneficiaries. That doesn’t mean a benefits cut won’t be necessary at some point, but it does mean bankruptcy concerns are unfounded. Read the entire article at

Social Security Going Broke?

Even with $2.89 trillion in asset reserves as of the end of September 2017, Social Security Board of Trustees predict that Social Security—s Trust will begin paying out more in benefits than it—s collecting in revenue by 2022. However, due to how Social Security is funded ensures that the program can never go bankrupt. Read more in Sean Williams— column as he reviews how Social Security is funded and what the average American worker will owe in 2018. Read article at

Eldercare Locator

The Eldercare Locator is a public service supported by the U.S. Administration on Aging—is the only nationwide service that connects older Americans and their caregivers with trustworthy local support and resources on an array of aging issues.

Launched in 1991, the Eldercare Locator is the only national information and referral resource to provide support to consumers across the spectrum of issues affecting older Americans. The Locator was established and is funded by the U.S. Administration on Aging, part of the Administration for Community Living, and is administered by the National Association of Area Agencies on Aging. 1 (800) 677-1116

Quotable Statement for All Retirees

“Michiganders who worked day-in and day-out and played by the rules are counting on their pensions to retire with dignity,” Peters said. “It is not right to rip away the financial security that retirees earned through years of hard work, and I will keep fighting to make sure Michigan workers get the retirement they were promised.” US Senator Gary Peters the Central States Pension Fund plan.

For Your Health

Several chronic disease self-management workshops are scheduled to begin in January and February.
Options include Matter of Balance Fall Prevention, Chronic Pain PATH and Diabetes PATH.
PATH stands for “Personal Action Toward Health.”
All workshops are offered at no cost. 
(Donations are accepted at the conclusion of the final class.)
Pre-registration is required for all workshops.
To register, please call Christine at 517-887-1465.

  • Matter of Balance: Sparrow Health Center (2909 E. Grand River, Lansing) on Wednesdays from January 17th to March 7th 2018 from 2-4pm.
  • Chronic Pain PATH: Clinton County Medical Center (1000 S. US 27, St. Johns) on Wednesdays from January 17th to February 21st 2018 from 2-4:30pm. Free courtesy of Michigan State Medical Society Foundation.
  • Diabetes PATH: Eaton Rapids Medical Center (1500 S. Main St., Eaton Rapids) on Mondays from February 12th to March 19th 2018 from 10am-12:30pm.
  • Diabetes PATH: Mid-Michigan Physicians (1540 Lake Lansing Rd., Lansing) on Tuesdays from February 20th to March 27th 2018 from 6-8:30pm.
Special Benefits for Veterans from Treasury

Recent News Release (Weekly Digest Bulletin) from Treasury states

Current and former military members may be eligible to receive:

Editor’s note: June Morse may be contacted at or 517-886-9323.

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