The 32,000 pensioners who have a vote on Detroit’s plan to exit from bankruptcy are hearing plenty of messages about what their ballot decisions should be.
Political and business leaders have largely been urging a “yes” vote, citing the potential loss of $661 million in state and foundation “Grand Bargain” money for pension funding with a “no” vote. According to the city’s current Plan of Adjustment, if either class of pensioners — the police and fire fighters are one class, the non-uniform employees/retirees are another — votes against the plan, the outside money goes away and cuts are steeper. As it stands, an affirmative vote means pension cuts of up to 4.5 percent to pension payments plus some other reductions. Refusing to approve the plan means cuts of up to 27 percent to pension payments.
Other voices are campaigning against the plan. Based largely on the argument that pensions and workers’ benefits should be untouched, the campaign against the plan also raises objections to the state legislation that increases state oversight of the city’s finances and the pension boards.
Some retirees remain confused, and the retirement systems are holding information sessions. The Detroit News reports:
A divided crowd filed out of Fellowship Chapel Thursday, some vowing a fight, others saying they will likely concede to pension cuts as part of Detroit’s historic bankruptcy. Anger and questions remained for many following a two-hour informational meeting, the first in a series sponsored by the General Retirement System as its members prepare to cast ballots on the city’s debt-cutting plan. The plan would reduce their pensions, eliminate cost-of-living adjustments and — for some — recoup excess interest earnings paid to workers through a separate annuity savings fund.
Detroit News columnist Daniel Howes also wonders where the real leadership in the campaign for affirmative votes will come from:
At a time crying out for critical leadership — when the city’s retirees will decide between the public-private grand bargain and an undetermined Plan B likely to be much harder on them — would “the best advocate” for an unprecedented deal spelling the difference between something close to the retirement earned and a retirement teetering at or below the poverty line please step forward.
With ballots due July 11, the results won’t be known for several weeks, with many waiting nervously.