Detroit pensions

Stateside
3:56 pm
Tue July 22, 2014

Pensioners vote “yes” to cuts, bond holders prepare to fight

Downtown Detroit
Credit Ian Freimuth / Flickr

Detroit pensioners voted to accept the pension cuts and allow the Detroit Institute of Arts to become an independent institution. In response, bond insurers who could lose billions in Detroit’s bankruptcy are preparing to fight.

Detroit Free Press columnist Nancy Kaffer joined us today on Stateside to talk about what this means for Detroit.

Police and fire pensioners voted 82% in favor. General retirement pensioners voted 73% in favor. 

Two big bond insurers, Syncora and Financial Guaranty Insurance Company are promising to fight this agreement. 

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Opinion
12:29 pm
Tue July 22, 2014

Our future is tied to our kids' future, and a new report shows that doesn't look good

 

You have to give Detroiters a lot of credit.

They voted, by overwhelming margins, to accept major cuts to their pensions. In what was most surprising, nearly 90% of city retirees also voted to give up 90% of their health care benefits. They voted to make sacrifices in their old age to give their city a chance at a future, something that we should find pretty admirable.

Now, granted, they had a gun to their heads. They were told to take this deal, or something worse would be imposed on them, but they could have raged against the machine, and didn’t.

In fact, they weren’t even obligated to approve the health care cuts, though they probably couldn’t have stopped them.

People love to bash Detroiters, but throughout the years, they have stepped up time and again, voting to tax themselves when told they had to do so to save the city; voting now to accept new painful sacrifices.

Meanwhile, four classes of the city’s hugest creditors voted no on settlement offers made to them, and so further court battles lie ahead.

All of this is bound to overshadow another story today that in the long run may be as meaningful for our future.

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Law
12:37 am
Tue July 22, 2014

Detroit retirees say yes to the "grand bargain" in big victory for Kevyn Orr, DIA

The grand bargain would protect the Detroit Institute of Arts' collection from being sold to pay off the city's debts.
Credit Detroit Institute of Arts

The proposed "grand bargain" that would soften the blow to Detroit pensioners while preserving the city's art collection has cleared a major hurdle.

That's because city retirees have voted for the plan by an overwhelming margin.

As city creditors, pensioners got to cast ballots for or against emergency manager Kevyn Orr's bankruptcy restructuring. The grand bargain is an integral part of that plan of adjustment.

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Law
6:38 pm
Fri July 11, 2014

Detroit "grand bargain" ballots were due today

Credit Sam Beebe

Today was the deadline for Detroit retirees to vote on the city’s bankruptcy restructuring plan, known formally as a “plan of adjustment.”

The California firm tallying the votes had to receive them by today.

All creditors get to vote on the plan of adjustment. But pensioners’ votes are particularly key—especially when it comes to the future of the “grand bargain.”

That’s the deal to use more than $800 million in public and foundation money to minimize pension cuts, and protect the Detroit Institute of Arts’ collection from being sold to pay off creditors.

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Politics & Government
1:35 pm
Sun July 6, 2014

Deadline approaches for bankruptcy plan vote

Credit JSFauxtaugraphy/Flickr

DETROIT (AP) - The most anticipated vote in Detroit this summer isn't for a city office.

Instead, ballots due by Friday from city retirees could determine how quickly Detroit exits its historic bankruptcy and how much of the financial weight pensioners will bear.

Non-uniformed retirees are being asked to take a 4.5 percent pension cut and no cost-of-living allowances. Police and fire retirees are faced with reduced cost-of-living payments.

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Law
7:40 pm
Fri June 20, 2014

Schuette jumps into court fight over access to Detroit retirees' personal finance data

Michigan Attorney General Bill Schuette is jumping in the fight to prevent one of Detroit’s major creditors from accessing the personal financial records of city retirees.

Bond insurer Syncora Guarantee Inc. is on the hook for hundreds of millions of dollars if Detroit’s plan for exiting bankruptcy moves forward.

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Opinion
10:17 am
Mon June 9, 2014

Why some Detroit pensioners' votes are worth more than others in the 'grand bargain'

Surprisingly, perhaps, the so-called 'grand bargain' to solve Detroit’s bankruptcy sailed through the Legislature.

Now, there is nothing to do but wait.

Remember election nights in the old days, and staying up all night to find out who had won?

Well, we’ve got something like that again where Detroit is concerned, except this election night will last more than a month.

The Detroit bankruptcy settlement now depends on the votes of 32,000 city workers and retirees. We won’t know the final result until July 11 or later. These folks are being asked to agree to have their pensions cut, and promise not to sue.

Many retirees are also being asked to pay back some annuity savings money they were improperly credited with.

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Politics & Government
8:46 pm
Tue May 20, 2014

Committee vote expected in Detroit aid agreement

Detroit Mayor Mike Duggan wants the city to be able to get out from under state oversight if it's managing its finances.
Credit Mike Duggan

There could be a first vote tomorrow in the Legislature on an almost $200 million deal to aid the city of Detroit. Mayor Mike Duggan was one of those who testified prior to the historic vote. Duggan says, overall, he supports the plan.

“I want you to be comfortable we’re not going to be coming back in two years, four years, six years – that we’re going to solve this once and when we do solve it once, you’re going to be proud of how progress is made,” Duggan told the House Committee on Detroit’s Restructuring and Michigan’s Future.

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Politics & Government
2:17 pm
Sat April 26, 2014

Retirees' committee will back Detroit pension cuts

Detroit skyline
Credit Peter Martorano / Flickr

DETROIT (AP) - A committee representing Detroit retirees has agreed to endorse the city's plan to cut pensions in bankruptcy. The committee is supporting deals struck last week that would cut the pensions of general retirees by 4.5 percent and eliminate cost-of-living payments. Police officers and firefighters would see a cut only in their annual inflation allowance. Detroit also wants to recover certain generous annuity payments made since 2003.

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Politics & Government
9:57 am
Fri April 25, 2014

Detroit bankruptcy in cruise control – but there are big speed bumps ahead

Detroit’s historic bankruptcy case has picked up steam in the past couple of weeks.

The city reached tentative agreement with some of its major creditors, clearing the way for a relatively quick exit from bankruptcy court.

But there are still some key missing pieces that could derail the process, and now they’re mostly outside the city’s control.

“Now is the time to negotiate”

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Politics & Government
6:00 am
Thu April 17, 2014

With major settlements piling up, Detroit bankruptcy moves along at lightning speed

Detroit retirees protesting pension cuts.
Credit Sarah Cwiek / Michigan Radio

This has proven to be a watershed week in Detroit’s bankruptcy case, which is now moving along at lightning speed.

On Tuesday, representatives for Detroit’s two pension funds reached tentative settlements with the city.

The deals would spare Detroit’s retired police officers and firefighters any direct cuts to their pensions, while non-uniform retirees would take 4.5% cuts.

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Economy
4:54 pm
Tue April 15, 2014

Detroit bankruptcy: No pension cuts for police and fire retirees

Pension decisions made today in Detroit.
Credit Peter Martorano / Flickr

A major piece of the Detroit bankruptcy puzzle fell into place today.

The city reached a deal with the group representing Detroit's police and fire retirees. The deal means no cuts to monthly pension checks for retired officers and firefighters. 

We were joined by Michigan Radio's Sarah Cwiek in Detroit. 

Listen to the full interview above. 

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Politics & Government
1:07 pm
Tue April 15, 2014

Detroit bankruptcy mediators announce a deal with police and fire pensions

The Theodore Levin United States Courthouse in Detroit.
Credit Andrew Jameson / Wikimedia Commons

Mediators for the federal court overseeing Detroit's Chapter 9 bankruptcy say a deal has been reached between the city of Detroit and the Retired Detroit Police and Fire Fighters Association over pension and health benefits.

The deal calls for no cuts to current pension benefits, but does cut future "cost of living" increases in their benefits.

The Association's members still need to approve the plan through a vote.

The potential deal is the first agreement the city has reached with a group of retired workers.

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Politics & Government
10:04 pm
Tue April 1, 2014

Orr turns up the heat on Detroit pensioners; they push back

Retirees protest outside federal court in Detroit.
Credit Sarah Cwiek / Michigan Radio

Detroit pensioners are trying to turn up the heat on emergency manager Kevyn Orr Tuesday – just as he’s doing the same thing to them.

Protesters filled the street in front of Detroit’s federal courthouse on Tuesday to slam Orr’s proposed cuts to city pensions.

Orr filed a revised version of his bankruptcy restructuring plan there Monday. An earlier version, known formally as a plan of adjustment, was filed in February.

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Law
5:00 am
Sun March 9, 2014

Detroit bankruptcy judge delays reorganization plan trial, as city scrambles for creditor support

 

The judge overseeing Detroit’s bankruptcy case has pushed a scheduled trial on the city’s reorganization plan back by at least a month.

Judge Steven Rhodes had set a mid-June date trial date on the city’s proposed plan of adjustment. That plan is emergency manager Kevyn Orr’s basic road map for getting the city out of bankruptcy, and a key document in any municipal bankruptcy.

City lawyers had asked for the extension, reportedly to them more time to solicit votes for the plan.

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Politics & Government
9:32 pm
Mon March 3, 2014

Detroit's "plan of adjustment" on fast track as creditors line up to object

People who oppose Detroit’s plan to reorganize in bankruptcy have until the start of next month to file objections.

One group of about 20 residents, retirees and activists picked up the paperwork to do just that at federal offices in downtown Detroit Monday.

Reverend Charles Williams II and representatives from the National Action Network led the group of people looking to file individual objections to the city’s plan of adjustment.

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Opinion
10:39 am
Mon February 24, 2014

Pension cuts in Detroit's bankruptcy plan would be devastating and unfair

Well, the shoe finally dropped last Friday, or maybe it was a hammer. At any rate, we now know the details of Detroit’s proposed bankruptcy “plan of adjustment,” and they include pension cuts. Pretty massive pension cuts. Most pensioners would see their monthly checks cut by 34%. Police and fire retirees, whose pension fund is in better shape, lose 10%.

For many, this would be devastating. Devastating, and unfair.

There’s no doubt that Detroit’s pension funds were poorly managed. There’s also no doubt that the city was too liberal in its pension policy.

There are some folks who spent 30 years in a low-stress clerical job, and then were able to retire, move to Florida and collect a pension for life starting at age 52. That policy doesn’t make any sense even if the city of Detroit could afford it, and it never could.

My guess is that in the future, there won’t be any pensions for new city workers, just a defined contribution savings plan.

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Politics & Government
7:18 am
Mon February 24, 2014

In this morning's headlines: Gay marriage, meth bills, Detroit pensions

Morning News Roundup, Thursday, Oct. 13, 2011
User: Brother O'Mara Flickr

Same sex marriage trial

Michigan’s ban on same-sex marriage goes on trial this week in Detroit. The case involves a lesbian couple who want to get married so they can jointly adopt the special needs children they’re raising together.

Bills to crack down on meth move forward

"Legislation to stop the sale of ephedrine or pseudoephedrine to people convicted of methamphetamine-related crimes is moving ahead in Lansing. The state Senate last week overwhelmingly approved bills to alert Michigan stores not to sell cold medicine containing the popular ingredients for meth production to criminals convicted of meth offenses," the Associated Press reports.

Bankruptcy plan gives safety net for pensioners

"[Detroit's] bankruptcy plan calls for cutting pensions for general city retirees by up to 30 percent. But this fund would give some of that money back to pensioners who fall close to the federal poverty line," Sarah Hulett reports.

Detroit Bankruptcy
4:44 pm
Wed January 22, 2014

State leaders hope to join in on 'Grand Bargain' for Detroit pensions and the DIA

Gov. Snyder flanked by Bolger (right) and Richardville (left) making the announcement.
Gov. Snyder

Update 5:00 p.m. from Rick Pluta:

Governor Rick Snyder has proposed committing up to $350 million to help mitigate cuts to Detroit pension benefits – as well as keep assets of the Detroit Institute of Arts off the auction block.

The state’s offer would play out over 20 years and would match money raised from private donations to make sure DIA paintings, sculptures, and other works of art don’t get sold off to pay pension benefits that are central to the bankruptcy negotiations.

“This is not bailout,” he said. “This is a settlement. I want to be very clear about that.”

Snyder said one of the conditions would have to be creditors dropping any legal claims to DIA asserts.

“This is not geared toward the bondholders, bankers, or people on Wall Street,” he said. “This is geared towards Michiganders that worked really hard in our state and have a pension and are looking at a difficult situation – how do we improve that situation?” 

The governor says he hopes the state’s offer will help move the city through bankruptcy more quickly, which would be a good deal for the state.

The proposal must still be adopted by the Legislature. Republican leaders say hearings will begin very soon.

“We have some questions, some ‘t’s’ that need be crossed, some ‘i’s’ that need to be dotted, but in general is something that’s very positive and being received that way,” said state Senate Majority Leader Randy Richardville (R-Monroe). “So, we will consider it over the next few weeks. We will look in detail, and consider it as best we can.”

The governor’s offer came as Detroit bankruptcy judge Steven Rhodes refused to allow an evaluation of DIA assets to go ahead. Detroit’s creditors could still challenge the plan in bankruptcy court.

The state’s share would match contributions from private donors. It would come from money the state gets annually from the 1998 nationwide settlement between states and tobacco companies. The plan will be part of the governor’s budget proposal to be delivered Feb. 5.

Update 4:44 p.m.

Gov. Snyder and Sen. Majority Leader Randy Richardville (R-Monroe), and Speaker of the House Jase Bolger (R-Marshall) announced that they plan to support legislation aimed at saving Detroit pensions and DIA art.

From their press release:

Snyder, Senate Majority Leader Randy Richardville and House Speaker Jase Bolger announced they are working with the Michigan state legislature to allocate up to $350 million over the next 20 years to be combined with funds raised by private Michigan foundations to assist in saving retiree pensions. The governor recommends these state funds would come from tobacco settlement revenues...

“We are working on a fiscally sound mediation solution with clear conditions.  We will not participate in a bailout, nor allow these funds to go anywhere other than directly to retiree pensions,” said Snyder.  “This is an opportunity to work together to find solutions that will allow Detroit to get on a firm foundation faster, help pensioners, and ultimately save the Michigan taxpayers millions in the long run.  I want to applaud the foundations for taking this unprecedented and generous step and the mediators for facilitating these discussions.”

Snyder said there would be "strict conditions on any funds allocated towards the settlement." Money from the state, he said, must solely go toward pensions and that "independent fiduciaries manage the pension funds going forward."

Detroit's emergency manager released a statement after today's announcement saying in part:

"The level of proposed investment by the philanthropic community and the State will go far in helping reach a timely and positive resolution of the City's financial emergency.  A mutually agreed resolution to outstanding bankruptcy issues is the best way to help the City restore basic and public safety services to its 700,000 residents.  It is now time for the remaining parties to set aside the bargaining rhetoric and step forward and join this settlement to help this great city regain its footing and become once again an attractive place to live, work and invest."

MPRN will have more for us later.

11:43 a.m.

Many political deals have been dubbed a "grand bargain."

This "grand bargain" involves private money and potential state money to save Detroiters' pensions and the artwork at the Detroit Institute of Arts.

This morning federal mediators involved in the Detroit bankruptcy released a statement saying in part:

"We are advised that the governor of the State of Michigan, Rick Snyder, intends to announce soon his support for significant state participation in the plan to help protect the pensions of city of Detroit retirees, support the DIA, and revitalize the city in the aftermath of the bankruptcy. The governor  has indicated that he will engage with the Michigan Legislature to help secure this support for the plan."

Gov. Snyder is expected to hold a press conference at 3:30 announcing more details of the plan.

He'll be joined by Sen. Majority Leader Randy Richardville (R-Monroe), and Speaker of the House Jase Bolger (R-Marshall). It's a sign that these legislative leaders are supportive of the plan.

Chief bankruptcy mediator Judge Gerald Rosen struck a deal with private foundations that pledged more than $300 million to help Detroit solve the pension/art problem.

With that money pledged, state leaders took note and are deciding whether to try to match the money pledged by the foundations.

Earlier reports stated that the plan calls for sending Detroit $350 million over 20 years. 

We'll find out more details later today.

How Michigan legislators will react to this plan is anyone's guess. In their statement, federal mediators urged that "all parties approach the issue with an open mind."

Politics & Government
7:34 am
Mon January 13, 2014

In this morning's headlines: Power in Flint City Council, Detroit swap deal, MEAP tests

User: Brother O'Mara flickr

Flint City Council could gain power back today

The Flint city council has been largely powerless in the two years since the appointment of an emergency manager. But that begins to change this evening. Emergency manager Darnell Earley says the City Council will now be asked to get more involved in city decisions.

Detroit swap deal to resume today

"A bankruptcy court hearing on Detroit's renegotiated deal to pay off two banks in an interest rate swaps deal is scheduled to resume today," The Associated Press reports.

Lawmakers to discuss which standardized test students will take this year

"State lawmakers will begin hearings this week to determine which standardized test Michigan students will take starting next spring. State education officials say the Smarter Balanced Assessment is the only good option to replace the Michigan Educational Assessment Program – or MEAP," Jake Neher reports.

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