Updated with correction
Ann Arbor, Mich., is searching for a consultant to advise the city on a potential purchase of a group annuity contract from an insurance company to transfer the liabilities of the $504 million Ann Arbor City Employees' Retirement System, said Tom Crawford, the city's chief financial officer, in an email.
The city issued an RFP because it is exploring the possibility of transferring some or all of its pension liabilities due to the volatility of its required annual contributions, Mr. Crawford said.
"This expenditure volatility for the city can be challenging because the state policies for funding local governments does not provide the financial flexibility needed by many Michigan communities to manage their own local challenges," Mr. Crawford said. "The amount of liabilities to be transferred will depend on the feasibility, analysis and affordability of the options that are offered."
As of June 30, the pension fund's liabilities totaled $584 million, giving the pension fund a funding ratio of 86.3%. Current retirees as of that date accounted for $383 million in liabilities.
The RFP is available on the city's procurement website. Proposals are due at 2 p.m. EDT on March 28. A selection is expected later in April or in May.