Detroit pensions

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.

Politics & Government
5:00 am
Tue January 7, 2014

Detroit emergency manager "freezes" pension benefits, then backs off -- temporarily

Detroit emergency manager Kevyn Orr moved to “freeze” pension benefits for some city retirees — then suspended that action as the city and pension fund representatives talk in mediation.

Orr quietly issued that order late last month. It affects members of Detroit’s General Retirement System—not police officers or firefighters, who have their own, separate pension fund.

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Politics & Culture
4:56 pm
Wed December 11, 2013

Stateside for Wednesday, December 11th, 2013

Renewable resources, such as wind and solar, are likely to supply 10% of Michigan electricity by 2015, as state law mandates. On today’s program, we looked at a recent report that says we could be doing more, boosting the number to 30% by 2035.

Then, the losing streak of Medora, Indiana's high school basketball team compelled two Michigan filmmakers to move there, and to tell the story of this small industrial town and the people who live there.

And, federal Judge Stephen Rhodes gave Detroit the go-ahead to slash its public pension and healthcare benefits. What will this mean for Detroit retirees?

First on the show, it was one year ago this day that the State Legislature and Governor Rick Snyder passed a set of bills into law that made some very contentious history in our State.

On December 11th, 2012, Michigan became the nation's 24th right-to-work state.

The laws took effect in March, making it illegal to force workers to pay union dues as a condition of employment.

One year later, has right-to-work changed Michigan?

We were joined for this discussion by Michigan State University economist Charley Ballard, and, from the Michigan Chamber of Commerce, Wendy Block.

Economy
4:40 pm
Wed December 11, 2013

What would cutting pensions mean for future Detroit retirees?

user: jodelli Flickr

Federal Judge Stephen Rhodes gave Detroit the go-ahead to make cuts to public pension and healthcare benefits.

Emergency Manager Kevyn Orr maintains that Detroit's pension funds are unfunded by $8 billion. That's a big chunk of the city's $18 billion in overall debts and long-term liabilities. 

So what will happen to future pensions?

Cynthia Canty spoke with Alicia Munnell about the possibility of cutting pensions for future city retirees. Munnell is the director of the Center for Retirement Research at Boston College.  

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Politics & Government
7:05 am
Fri December 6, 2013

In this morning's headlines: Land lines, campaign finance, how to save DIA

User: Brother O'Mara flickr

State Senate approves bill making it easier to end land line service

"Phone companies would have an easier time discontinuing traditional land lines under legislation that has passed the Michigan Senate. The bill approved yesterday is designed to loosen regulations on AT&T and other providers as more customers forgo land lines and just carry cellphones," the Associated Press reports.

House is close to vote on issue ads and campaign finance bills

"State House Speaker Jase Bolger says the House is close to a vote on legislation that would double the amount of money people can give to political campaigns. The bill would also block a proposal that would require groups who pay for so-called 'issue ads' to disclose their donors," Jake Neher reports.

Philanthropists encouraged to save DIA and pensioners

One Michigander has offered to donate $5 million to help protect the DIA and Detroit retiree pensions. As the Detroit Free Press reports,

"Millionaire A. Paul Schaap said he plans to meet today with U.S. Chief District Judge Gerald Rosen, who is serving as mediator in Detroit’s bankruptcy case. Rosen has been trying to persuade at least 10 charitable foundations to put up $500 million to spin off the DIA from the city, which could then use the money to reduce pension cuts and improve services."

Stateside
4:47 pm
Tue December 3, 2013

Detroit can file for Chapter 9 bankruptcy. Now what?

Detroit Mayor Dave Bing, Gov. Rick Snyder, and the city's Emergency Manager Kevyn Orr.
mich.gov Michigan Government

Today, U.S. Bankruptcy Judge Steven Rhodes ruled that Detroit is eligible to enter Chapter 9 bankruptcy protection, and to cut the pensions of city retirees.

What does it mean for residents? Current city employees? City pensioners?

Eric Scorsone, a municipal finance expert from Michigan State University, talks to us about what lies ahead after today’s ruling.

Listen to full interview above.

Stateside
4:20 pm
Thu November 14, 2013

Could a private fund save both the DIA and public pensions?

The Detroit Institute of Arts
Flickr

If anything’s clear coming from Detroit’s bankruptcy case it is this: the city needs new solutions.

Daniel Howes, Detroit News business columnist, wrote his column today on a proposal from Chief U.S. District Judge Gerald Rosen. Rosen is proposing a new private fund that could have a major impact on the future of the Detroit Institute of Arts, the city’s retired workers and bankruptcy proceedings.

Listen to the full interview above.

Politics & Government
11:30 pm
Thu September 12, 2013

Duggan wins Detroit retirees' endorsement

Mike Duggan won the endorsement of Detroit retirees
Credit Sarah Cwiek / Michigan Radio

A group representing more than 12,000 city retirees has endorsed Mike Duggan for Detroit mayor.

The Detroit Retired City Employee Organization is throwing its weight behind Duggan because, according to member John Eddings, “The city needs to get it right this time.”

“And looking at the candidates, there’s only one person who has the demonstrated ability to take care of the problems that we have,” Eddings said. “And that person is Mike Duggan.”

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Politics & Government
5:23 pm
Fri September 6, 2013

Misspent retirement funds 'robbed' Detroit's General pension

Detroit's Emergency Manager Kevyn Orr.
State of Michigan Michigan.gov

Money in Detroit’s pension fund was misspent on bonus checks, The Detroit News’ Robert Snell reported.

That information is coming from a report on the city’s General pension fund from consulting firm Conway MacKenzie. According to the report, more than $532 million was distributed as bonus checks over the last two decades, instead of staying in the pension fund’s coffers.

The so-called 13th checks — or annual bonuses — weren’t a part of the city’s pension plan. Yet, the report claims that even in the “good and bad years,” the money intended for the workers’ saving plans was doled out early -- which according to the report, was “effectively robbing (the General pension fund) of precious funds necessary to support the traditional pensions the city had promised.”

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Politics & Government
3:06 pm
Mon September 2, 2013

Despite major setbacks, 'The Dream Continues' at Detroit Labor Day parade

Credit Sarah Cwiek / Michigan Radio

 Machinists, teachers, police were among the many unionized workers to hit the streets of downtown Detroit Monday morning.

The city’s annual Labor Day parade draws thousands of union members from across southeast Michigan each year.

It’s typically a time for union workers to flex some muscle. But this year’s parade was as much about re-grouping after a year of setbacks.

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Politics & Government
7:44 pm
Sat August 31, 2013

Detroit emergency manager fires pension fund chair

(file photo)
Steve Carmody/Michigan Radio

DETROIT (AP) - Detroit's state-appointed emergency manager has fired the chairman of one of the city's two pension funds from his municipal job.

The Detroit News and Detroit Free Press report Friday that Kevyn Orr fired Cedric Cook. Cook served as a senior data program analyst for information technology services and has been chairman of the Detroit General Retirement System.

Cook took an all-expenses-paid trip this year to a conference in Hawaii. Orr spokesman Bill Nowling says the dismissal was due to Cook's poor job performance, not for taking the trip.

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Opinion
8:37 am
Tue August 6, 2013

The truth about Detroit pensioners

Lessenberry commentary for 8/6/2013

Detroiters are voting today in one of the strangest and yet most important primary elections the city’s ever had. Those they send to the November runoff will be fighting for jobs which at first will have no power. That’s because everything is now in the hands of Emergency Manager Kevyn Orr, and U.S. Bankruptcy Judge Stephen Rhodes.

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