Wayne County next in line for Bankruptcy...?

Battle lines were drawn Monday as Wayne County Executive Warren Evans rolled out a "recovery plan" to fix the county's finances by cutting $230 million over four years — a proposal a key union leader called "essentially a nonstarter."Evans' package includes pay and benefit cuts for current employees; the end of health care coverage for future retirees; and a restructured pension system. He called the plan "strong medicine" that's needed to cure an annual structural deficit of $70 million and a pension fund that's funded at less than 50 percent.
"I know it's a tough pill to swallow," Evans said. "But it's a tough pill for all of us to swallow."
Without action, the county executive warned, Wayne County will run out of money by August 2016. He announced his plan at a news conference after briefing union leaders and other county elected officials. "... The county is in a very dire financial situation," Evans said Monday. "[[The plan), in my opinion, represents the most equitable and efficient attempt to eliminate the county's deficit."


read the plan
http://www.detroitnews.com/story/new...ting/26439247/

I just want to pick up on one point: "end of health care coverage for future retirees."

I saw an article that OPM [[Federal Office of Personnel Management which is responsible for federal retirees) said that the current number of federal retirees keeping their health benefits is an 'unsustainable' [[expense).

More and more governments, corporations, etc. want to get retirees off of their employer sponsored plans [[e.g. BC/BS) + Medicare A and get them on to Medicare A, B and D. A, B, and D cost the employer zero dollars for a retiree. A family health care plan for Mr. & Mrs. Retiree isn't cheap, even if the employee shares say 25% of the cost.

Maybe for 'empty nesters' with one spouse 65 and another 62: Medicare A, B, and D for the 65 year old and Obamacare for the other [[until he or she turns 65). If the 62 year old has health insurance coverage through his or her employment, then the employer of the 65 year old is off the hook.

I see more and more movement to transfer the health care expenses of retirees to Medicare and away from their employers.

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Originally Posted by emu steve

I just want to pick up on one point: "end of health care coverage for future retirees."

I saw an article that OPM [[Federal Office of Personnel Management which is responsible for federal retirees) said that the current number of federal retirees keeping their health benefits is an 'unsustainable' [[expense).

More and more governments, corporations, etc. want to get retirees off of their employer sponsored plans [[e.g. BC/BS) + Medicare A and get them on to Medicare A, B and D. A, B, and D cost the employer zero dollars for a retiree. A family health care plan for Mr. & Mrs. Retiree isn't cheap, even if the employee shares say 25% of the cost.

Maybe for 'empty nesters' with one spouse 65 and another 62: Medicare A, B, and D for the 65 year old and Obamacare for the other [[until he or she turns 65). If the 62 year old has health insurance coverage through his or her employment, then the employer of the 65 year old is off the hook.

I see more and more movement to transfer the health care expenses of retirees to Medicare and away from their employers.

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For the over 65 crowd with Medicare A & B, the cost of a "Medigap" package is probably affordable either for the retiree or the pension fund. The big problem is insuring the 55-65 retirees and their families.

Maybe they can build another defunct racecourse or jail or [[insert kickback project name)......

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Originally Posted by Vic01

Battle lines were drawn Monday as Wayne County Executive Warren Evans rolled out a "recovery plan" to fix the county's finances by cutting $230 million over four years — a proposal a key union leader called "essentially a nonstarter."...snip...

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Is there a union leader who doesn't say that when any reform is required?

The battles lines were already drawn. Just until now both management and union were on the same side. Management finally had no choice but to do something. But they're wrong. The best solution is to do nothing, and let the cash run out. Then, and only then, to you get true reform that can help the citizens instead of the 2-5%.

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Originally Posted by Wesley Mouch

Is there a union leader who doesn't say that when any reform is required?

The battles lines were already drawn. Just until now both management and union were on the same side. Management finally had no choice but to do something. But they're wrong. The best solution is to do nothing, and let the cash run out. Then, and only then, to you get true reform that can help the citizens instead of the 2-5%.

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Got to agree here. Nothing is going to be fixed outside bankruptcy because so much is going to need to be imposed.

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Originally Posted by Hermod

For the over 65 crowd with Medicare A & B, the cost of a "Medigap" package is probably affordable either for the retiree or the pension fund. The big problem is insuring the 55-65 retirees and their families.

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Completely agree.

There are still many employers, esp. governments, which make it easy for employees to retire long before age 65 setting up the retiree's health care problem.

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Originally Posted by Smirnoff

Maybe they can build another defunct racecourse or jail or [[insert kickback project name)......

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Or do some more hiring, firing, or retiring on the Family, Friends, and Lovers plan.

This is the intriguing next step, as I mentioned many, many months ago. Will the results in bankruptcy result in bringing people to the table? Wayne County has no art, and I would guess that there is no appetite in Lansing for throwing money at Wayne County.

On the other hand, if the changes are to existing employees and non-vested pensioners, I don't think that bankruptcy is necessary to make the reductions mentioned in the plan. An EM, under PA 436, can unilaterally terminate or modify employment agreements.

I don't know about Wayne County's debt load, or if they floated bonds to pay pension costs. I'd love to get that information.

Police and fire do not contribute to social security. Thus, unless somehow they got their 40 quarters in on another job, they are not eligible for SS or Medicare when they turn 65. Real catch 22 to eliminate their health care. But who GAF?

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Originally Posted by BankruptcyGuy

I don't know about Wayne County's debt load, or if they floated bonds to pay pension costs. I'd love to get that information.

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They haven't done that to my knowledge.

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Originally Posted by Ray1936

Police and fire do not contribute to social security. Thus, unless somehow they got their 40 quarters in on another job, they are not eligible for SS or Medicare when they turn 65. Real catch 22 to eliminate their health care. But who GAF?

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Ray, is that true for all law enforcement personnel, or just DPD and DFD?

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Originally Posted by Ray1936

Police and fire do not contribute to social security. Thus, unless somehow they got their 40 quarters in on another job, they are not eligible for SS or Medicare when they turn 65. Real catch 22 to eliminate their health care. But who GAF?

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Just asking:

Are you sure about Medicare tax??? [[It is a separate tax, although almost everyone these days pay both Social Security and Medicare).

E.g., I was a federal employee who was covered by CSRS [[a federal retirement system which PRE-dated Social Security). I made the same payment as I would if I had been covered under Social Security. I paid into Medicare [[but instead of Social Security I paid into CSRS).

I might be wrong, but I do NOT think any employment wages are exempt for Medicare tax.

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Originally Posted by emu steve

Completely agree.

There are still many employers, esp. governments, which make it easy for employees to retire long before age 65 setting up the retiree's health care problem.

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Very true. There are tons of people who hit 50 and want to retire right away or in the next few years. Maintaining healthcare for a retiree & their dependents is expensive, even crippling in this case. I know many County retirees who left as early as age 50 who lived a meat & potatoes, couch potato lifestyle. That lifestyle is coming back to bite them right now as they have many health problems related to it, and extra health care costs covered by insurance are incurred because of it.

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Originally Posted by BankruptcyGuy

Ray, is that true for all law enforcement personnel, or just DPD and DFD?

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Everyone in Wayne County pays into SS for retirement & Medicare.