A divided Detroit General Pension Fund board has voted to support the city’s plan to exit bankruptcy even though it requires establishing a committee to watch over the board’s investments for the next two decades.
The General Pension Fund includes about 18,000 current and retired city workers who face a 4.5 percent cut in the monthly payments under the Plan of Adjustment crafted by Emergency Manager Kevyn Orr. If the workers do not approve the plan, Bankruptcy Judge Steven Rhodes could impose even steeper cuts.
Members of the Police and Fire Retirement system are also considering the plan, which does not cut public safety workers’ wages but does reduce cost of living increases. The union representing police officers is urging its members to reject the plan, arguing it ultimately takes money away from Detroit cops who already make abysmally-low salaries.
At stake is the so-called “Grand Bargain” between the state and private foundations to provide about $660 million to shore up the pension systems and save the city from potentially having to sell any of the collection at the Detroit Institute of Arts. The Grand Bargain hinges on both Detroit pension systems accepting the cuts outlined in the plan of adjustment.
-By WDET’s Quinn Klinefelter