News Story

Seven Ann Arbor Retirees Getting Six-Figure Pensions

The highest pension was for $126,216 to former fire chief who worked 25 years

Seven former city of Ann Arbor employees are currently collecting pensions that exceed $100,000 a year, according to records from the city-run pension system.

The highest payout is to former fire chief Thomas Schmid, who is getting $126,216 a year. Schmid retired in 2002 after 25 years of service.

The average pension payout from Ann Arbor’s retirement system was $34,080, but not everyone getting payments is a former employee. For example, some surviving spouses are also receiving benefits. One person whose husband worked for the fire department and died in 2003 receives an annual pension of $43,000.

Gretchen Virlee-Wagner was a fire department employee who managed to claim a final-year salary of $307,516 in 2017. That amount included payouts for unused paid leave and sick time. Virlee-Wagner now collects an annual pension of $68,036.

The New York Times published a story on April 22 claiming that the public sector was losing its middle-class status with the disappearance of middle-income jobs.

Michigan Capitol Confidential has been examining public sector salaries and pensions in this state.

According to city of Ann Arbor records, Thomas Arreola was a city police officer who retired in September 2017. His base annual salary then was $81,723. His annual pension is $55,109, or about 67 percent of his base salary.

Dean Ball, the deputy director of state and local policy for the Manhattan Institute, said that amount was in the ballpark of most public sector pensions.

“Many defined benefit public sector pension plans offer about 60 percent of the employee’s final average salary every year in perpetuity. A generous system might be closer to 70 or 75 percent,” Ball said in an email.

The median household income in Michigan was $52,492 in 2016, according to an ongoing U.S. Census Bureau survey.

Ann Arbor’s pension fund owes $68 million in unfunded liabilities and is 88 percent funded. The system pays out about $36.1 million in benefits to 1,061 recipients each year.