Detroit Retirees Sue City to Stop Pension Cuts, And Request to Have PA 436 Repealed

**Ray1936** · July-11-13, 10:20 AM

When y'all leave, stay out of Nevada. It's already too crowded.

**jt1** · July-11-13, 10:44 AM

Originally Posted by Ray1936

When y'all leave, stay out of Nevada. It's already too crowded.

I'll stay so my taxes can go up to ensure retiree checks continue going to Nevada, Florida and the other retiree states.

**313WX** · July-11-13, 11:10 AM

Originally Posted by Ray1936

When y'all leave, stay out of Nevada. It's already too crowded.

Nevada's too red for me personally.

**mwilbert** · July-11-13, 11:28 AM

Originally Posted by Ray1936

When y'all leave, stay out of Nevada. It's already too crowded.

Compared to where? Antarctica?

**Eber Brock Ward** · July-11-13, 11:30 AM

Originally Posted by jt1

I'll stay so my taxes can go up to ensure retiree checks continue going to Nevada, Florida and the other retiree states.

This. I would love to see out-of-city retirees get less than in-city, and then see out-of-state retirees get less than either of those.

You could even tie it to studies about how many dollars that people use within [x] miles of their homes go to taxes in those areas, so there is a rational basis for treating them differently.

Probably not enough to pass legal muster, but I know I'm not the only one that shakes my head when I see the majority of quotes from retirees and active employee program participants are from people that don't live in the city.

I just got my property tax bill in the mail yesterday. Kinda pissed that we get crappy services while a lot of that money will go to, like jt1 wrote, ensuring "retiree checks continue going to Nevada, Florida and the other retiree states."

These retirees act like they are getting screwed out of something they were "promised." Well, it sounds like they will be, and that sucks. But citizens were promised life, liberty, and the pursuit of happiness. The murder and violent crime rates tell me that the "life" promise isn't being fulfilled 100% or anywhere close to it. And the crushing conditions tell me that the "pursuit of happiness" promise is pretty dampened, too. And that sucks, too.

So why, when everyday citizens aren't getting 100% of what they were promised, and have not been getting anywhere near that for a long time, should retirees get 100% of what they were promised, or anywhere near that?

I think the answer is: "they shouldn't." Just like the bondholders.

Find out whatever percent of 100% the citizens have been getting [[which surely can't be much), and give that to the bondholders and pensioners alike.

Citizens first. Or if not first, the same as everyone else that's been promised something.

**bailey** · July-11-13, 12:00 PM

Originally Posted by Eber Brock Ward

So why, when everyday citizens aren't getting 100% of what they were promised, and have not been getting anywhere near that for a long time, should retirees get 100% of what they were promised, or anywhere near that?

I think the answer is: "they shouldn't." Just like the bondholders.

Find out whatever percent of 100% the citizens have been getting [[which surely can't be much), and give that to the bondholders and pensioners alike.

Citizens first. Or if not first, the same as everyone else that's been promised something.

This part I agree with... the first part not so much. It's a free country, people can retire where they choose.

**Novine** · July-11-13, 12:05 PM

The obvious difference is that the city of Detroit didn't promise you anything as a resident and didn't ask you to defer pay and benefits in return for future compensation.

**corktownyuppie** · July-11-13, 12:11 PM

Detroit may not have promised residents anything, that I will admit. You still need to look at this from the point of view of reality, though. Even though Detroit residents weren't promised anything, the reality is that if they all leave, then there will be even less money to pay the creditors -- whether it be pensioners or banks.

This is why the "residents first" concept will eventually happen. It won't be because everyone "wants" it. But everyone knows that if population keeps depleting, then there's even less to go around.

On the other hand, Detroiters will also need to accept:

- more oversight
- less power
- "loss" of control over "city jewels"
- and 100 things that people will be pissed off about.

**mwilbert** · July-11-13, 12:33 PM

Originally Posted by Novine

The obvious difference is that the city of Detroit didn't promise you anything as a resident and didn't ask you to defer pay and benefits in return for future compensation.

Sure, but there is an implicit agreement that in exchange for your local taxes, you get some level of service, and frankly, a level of service quite a bit higher than Detroiters get, especially given the level of taxation in Detroit. I'm not saying that retirees don't have legitimate claims, but I don't see that those claims obviously have a higher priority than those of the current residents. I imagine we will see what the bankruptcy court thinks.

**DetroitPlanner** · July-11-13, 02:02 PM

As I have mentioned earlier, my parents are retired City employees, so this will impact my family personally.

I am particularly concerned about the police and fire than I am my own parents. My parents at least have SSI and other retirement accounts. I know dozens of current and retired police and fire who for some reason were able to get SSI waived due to their pension plans.

Bottom line is it will hurt my parents, may hurt me in the future, but it will devastate those who were career first responders. My friends are now at the age where they can't go back and do it over [[mid-40's).

**CityGirl** · July-11-13, 03:58 PM

Originally Posted by DetroitPlanner

I am particularly concerned about the police and fire than I am my own parents. My parents at least have SSI and other retirement accounts. I know dozens of current and retired police and fire who for some reason were able to get SST waived due to their pension plans.

Bottom line is it will hurt my parents, may hurt me in the future, but it will devastate those who were career first responders. My friends are now at the age where they can't go back and do it over [[mid-40's).

This. Thank you for this, DP.

To all those so in favor of dipping into the pockets of the retired police and fire:

So, IF the pensions of the retired DPD and DFD are taken, where do they turn for financial assistance? They cannot expect to get help from SSI because they have never paid into it.
My retired DPD father is 70 years old. He has been retired for about 10 years. He cannot go out, be competitive, and expect to earn a living wage in a job, now. Currently, he lives a humble life outside the city limits. Yes, he stayed in the city until just a handful of years ago, until arson and theft of his property drove him away. Never mind the crack houses across the street running day and night. He deserves a quality of life in his elderly years that the city cannot offer. Don't we all? Don't we all deserve to live where we feel safe?

But, until taking away retirement hits YOUR pocketbook, you won't get it.

Do the people of Detroit deserve better services, yes. Yes they do, but should it be put on the backs of those who will not be able to help themselves after giving a lifetime to the city already?

**Eber Brock Ward** · July-11-13, 04:12 PM

To be fair, I've posted in other places that police and fire should be excluded to the extent of what they would have gotten in SSI because of the way social security is structured.

So an eligible public safety person would first get the $8,529.32 per year that they would have gotten via SSI [[adjusted in future years to be pegged to SSI), then the cuts kick in on a pro rata basis to the cuts made for other SSI-eligible retirees.

I think that's the only fair way to do it, and hope that some sort of allocation is made for police and fire in that way. Or that they get treated slightly better treatment, to account for that, than the GRS folks.

**313WX** · July-11-13, 05:10 PM

Originally Posted by CityGirl

This. Thank you for this, DP.

To all those so in favor of dipping into the pockets of the retired police and fire:

So, IF the pensions of the retired DPD and DFD are taken, where do they turn for financial assistance? They cannot expect to get help from SSI because they have never paid into it.
My retired DPD father is 70 years old. He has been retired for about 10 years. He cannot go out, be competitive, and expect to earn a living wage in a job, now. Currently, he lives a humble life outside the city limits. Yes, he stayed in the city until just a handful of years ago, until arson and theft of his property drove him away. Never mind the crack houses across the street running day and night. He deserves a quality of life in his elderly years that the city cannot offer. Don't we all? Don't we all deserve to live where we feel safe?

But, until taking away retirement hits YOUR pocketbook, you won't get it.

Do the people of Detroit deserve better services, yes. Yes they do, but should it be put on the backs of those who will not be able to help themselves after giving a lifetime to the city already?

Let's be clear, no one WANTS to cut Grandma and Grandpa's benefits. I have a grandparent and a parent who depends on union retiree benefits, so I completely empathize with the pensioners.

But corktownyuppie said it best. Broke means broke. If the residents all leave the city due to the lack of services for trying to pay these pensions, then the pensioners won't get paid at all.

**Novine** · July-11-13, 07:14 PM

Can we stop pretending that "the residents" pay for city services? According to the 2012 - 2013 city budget, property taxes accounted for $120 million for services. The city income tax was $229 million. The utility tax was $42 million. These are out of $2.5 billion in revenue. Corporate taxpayers likely account for the bulk of the property and utility tax payments. Non-residents are a significant part of the income tax payments. I feel for the Detroit residents saddled with high taxes and poor services but those taxes don't translate into very many dollars for the city.

**Cincinnati_Kid** · July-11-13, 08:52 PM

Originally Posted by compn

yes, detroit is michigan, like it or not.

need to move out of wayne county for sure tho.
and stay the hell out of oakland co.

Just wondering... what makes Oakland County any different?

**Locke09** · July-11-13, 09:51 PM

Why do some people deserve to be paid for the services they provided or will provide [[EM, consultants, new police chief, Gary Brown, bankruptcy lawyers, etc.) and other people [[retirees) do not? No matter who the retiree is, uniform or non-uniform, it is unethical at least to have made a commitment to them, allowed them to honor their part of the commitment, and then renege.

The citizens of Detroit played a part in making that commitment by choosing the leaders who negotiated wages and benefits, passing every bond proposal the city ever asked for and accepting or at least expecting the services those retirees provided. Then a lot of those citizens moved to the suburbs and left a smaller contingent behind to pay the bills.

**Cincinnati_Kid** · July-11-13, 09:57 PM

^^ I totally agree. The retirees have to pay for other people's un-ethical transgressions.

**mwilbert** · July-11-13, 11:59 PM

Originally Posted by Locke09

Why do some people deserve to be paid for the services they provided or will provide [[EM, consultants, new police chief, Gary Brown, bankruptcy lawyers, etc.) and other people [[retirees) do not? No matter who the retiree is, uniform or non-uniform, it is unethical at least to have made a commitment to them, allowed them to honor their part of the commitment, and then renege.

The citizens of Detroit played a part in making that commitment by choosing the leaders who negotiated wages and benefits, passing every bond proposal the city ever asked for and accepting or at least expecting the services those retirees provided. Then a lot of those citizens moved to the suburbs and left a smaller contingent behind to pay the bills.

Lots of people may deserve stuff, but it seems Detroit doesn't have the money to give everyone what they deserve, so some people aren't going to get it. It is hardly surprising that people who are still providing services have more leverage to get paid than people who aren't. And while it may well be unethical to renege on an agreement, that is exactly what happens in bankruptcy--an entity can't make good on all its obligations, and it doesn't.

**Wesley Mouch** · July-12-13, 12:59 AM

Originally Posted by Locke09

Why do some people deserve to be paid for the services they provided or will provide [[EM, consultants, new police chief, Gary Brown, bankruptcy lawyers, etc.) and other people [[retirees) do not? No matter who the retiree is, uniform or non-uniform, it is unethical at least to have made a commitment to them, allowed them to honor their part of the commitment, and then renege.

Why do you think retirees are at the end of the line behind everyone else. That decision will be made by a bankruptcy judge. He may decide to pay retirees. He may not. He may decide to pay consultants, or he may not.

But that said, I don't see why retirees should be exempt from suffering. There are many deserving retirees. And no doubt a few people who didn't work very hard or serve long enough [[see Wayne County). Let's suppose the judge says everyone with a city pension over $100,000 has to settle for $90,000. Anyone with pensions under $40,000 keep 100%. Would that be unreasonable?

**Locke09** · July-12-13, 08:02 AM

Originally Posted by Wesley Mouch

Why do you think retirees are at the end of the line behind everyone else. That decision will be made by a bankruptcy judge. He may decide to pay retirees. He may not. He may decide to pay consultants, or he may not.

But that said, I don't see why retirees should be exempt from suffering. There are many deserving retirees. And no doubt a few people who didn't work very hard or serve long enough [[see Wayne County). Let's suppose the judge says everyone with a city pension over $100,000 has to settle for $90,000. Anyone with pensions under $40,000 keep 100%. Would that be unreasonable?

I think they are last in Orr's line, because they are. You are right that a bankruptcy judge might decide otherwise, and that is why, contrary to what Orr is trying to make them believe, the retirees' best bet is in court.

I have a problem with anyone failing to pay any debt they owe. The only exception is if they cannot survive if they continue paying the debt. If it just keeps them from thriving and growing, I say that is still unethical and not a good enough excuse. I feel this universally, across the board - personal finances, government finances and corporate finances. It might be legal, but it's not something to be bragging about or salivating over as I see too many people doing now.

**Eber Brock Ward** · July-12-13, 08:20 AM

Originally Posted by Locke09

I think they are last in Orr's line, because they are. You are right that a bankruptcy judge might decide otherwise, and that is why, contrary to what Orr is trying to make them believe, the retirees' best bet is in court.

I have a problem with anyone failing to pay any debt they owe. The only exception is if they cannot survive if they continue paying the debt. If it just keeps them from thriving and growing, I say that is still unethical and not a good enough excuse. I feel this universally, across the board - personal finances, government finances and corporate finances. It might be legal, but it's not something to be bragging about or salivating over as I see too many people doing now.

To be fair, this is a lot of handwringing over relatively little.

According to their Boards, the two pensions are funded something like 80-95%. Which means that the worst the pensioners would get is 80-95 cents on the dollar, if their assumptions are correct [[lol), because that 80-95% is secured.

Tough to sympathize with someone complaining about getting "only" 80-95% of their pension when there are no streetlights, cops and EMS are a wish, and so on.

**Novine** · July-12-13, 10:14 AM

The percentage of funding of the pension funds means nothing to this discussion. The funds could be funded at 150% but Orr is talking about cutting back or eliminating the pension payouts and foregoing payments for existing employees. The funds don't do you much good if you're not getting paid anything.

**Wesley Mouch** · July-12-13, 10:36 AM

Originally Posted by Novine

The percentage of funding of the pension funds means nothing to this discussion. The funds could be funded at 150% but Orr is talking about cutting back or eliminating the pension payouts and foregoing payments for existing employees. The funds don't do you much good if you're not getting paid anything.

Novine, I don't think there's much talk about eliminating pension payouts. But adjustments are on the table. That's all. Why can't adjustments be on the table?

Me, I expect that city pensioners [[and that has included my family) will be treated fairly. There will be adjustments. Not elimination. Let's protect those with small pensions, and adjust those with more than is needed to support a decent retirement. Does anyone here think we need to have any pensioner making $100,000 a year?

**corktownyuppie** · July-12-13, 12:01 PM

Originally Posted by Novine

The percentage of funding of the pension funds means nothing to this discussion. The funds could be funded at 150% but Orr is talking about cutting back or eliminating the pension payouts and foregoing payments for existing employees. The funds don't do you much good if you're not getting paid anything.

Existing employees? Ha. Every municipality in the country is transitioning away from a defined benefit and toward a defined contribution. That needed [[and still needs) to happen in Detroit with or without bankruptcy. One could argue that the delay in doing this change has only accelerated our spiral into insolvency.

**corktownyuppie** · July-12-13, 12:03 PM

Originally Posted by Novine

Can we stop pretending that "the residents" pay for city services? According to the 2012 - 2013 city budget, property taxes accounted for $120 million for services. The city income tax was $229 million. The utility tax was $42 million. These are out of $2.5 billion in revenue. Corporate taxpayers likely account for the bulk of the property and utility tax payments. Non-residents are a significant part of the income tax payments. I feel for the Detroit residents saddled with high taxes and poor services but those taxes don't translate into very many dollars for the city.

Interesting point. So it is kind of a chicken/egg question. The citizens share of revenue is small. On one hand, you could say that the residents aren't the ones paying for city services. On the other hand, you could say that when citizens are only covering 5% of your annual revenue, them maybe we need to stop losing citizens.