Detroit Cuts Deal With Retired Police and Firefighters

Detroit has reached a deal with some retired workers over pension benefits while cutting monthly payments for other former employees in a move that could give a boost to the city’s plan to exit bankruptcy in October, officials said Tuesday.

According to tentative agreements, retired police officers and firefighters will continue to receive their full pensions while those who do not work in public safety will have some of their benefits curtailed. Those cuts include a 4.5 percent decrease and the elimination of cost-of-living payments for general fund pensioners, said Tina Basset, spokesperson for the fund.

The agreement will cover more than 20,000 retired workers in a city going through one of the largest public bankruptcies in U.S. history. Both the retirees, as well as current workers who qualify for a future pension, will be allowed to vote as creditors in the bankruptcy.

Retired Detroit Police and Fire Fighters Association attorney Ryan Plecha said preserving the pension benefits was the “crown jewel.”

Bill Nowling, a spokesperson for Detroit emergency manager Kevyn Orr, who is overseeing the bankruptcy process, said the deal with retired workers had been possible because of an improved financial performance of the pension funds.

However, both deals depend on the $816 million that Detroit is hoping to raise from foundations, philanthropists and the state of Michigan. Lawmakers are yet to approve Michigan’s $350 million contribution.