It’s not often we see Detroit held up as a role model — and plenty of people will disagree that the new city pension plans are anything that should be emulated — but attention paid to our city from elsewhere is something Next Chapter Detroit is always looking out for. In this case, it comes from the Charleston (West Virg.) Daily Mail in the wake of the recent revelation that municipalities in that state are about $1 billion short in funding their police and firefighter pensions.
A West Virginia tax on insurance premiums provides about $17 million annually, the Daily Mail reports. Still, the paper urges more leadership on pension funding issues, citing Detroit’s new plan:
Legislators who regulate municipal pensions must do something. But what? An agreement by unions and city officials in Detroit gives hope. Unions agreed to scale back the pension plans in the face of the city’s bankruptcy court proceedings.
The Daily Mail neglects to print the details of the plan, as NextChapterDetroit.com reported:
Terms of the new plan maintain parts of a defined benefit system but also require a contribution from current employees, which will be deducted from their salaries beginning July 14. For police and firefighters, the contribution will be 6 percent of their weekly pre-tax base salary, while non-uniform employees in the General Retirement System will contribute 4 percent. For employees hired after June 30, the contributions will be 8 percent.
But with such a lack of real conversations and initiatives about municipal reform, we thought the Charleston view was worth posting.