Pension Settlement Coming Soon?

[corktownyuppie]

Detroit — The city’s lawyers Tuesday announced they have reached a deal that will protect members of a retiree committee from lawsuits associated with Detroit’s bankruptcy case.

The deal will be filed soon in bankruptcy court, but involves a legal injunction that would protect members of a committee representing Detroit retirees and beneficiaries whose benefits face cuts during the city’s restructuring.

I'm not in the negotiating room, but common sense would dictate that you don't worry about indemnifying the retiree committee unless you were considering a settlement.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2vh7oVPrm

[Ray1936]

There are separate committees for the general fund and the police and fire fund. Whatever, I'm tired of worrying about it all and will just take things as they come. One thing for sure; the only people to come out ahead will be the attorneys pulling in four hundred bucks an hour.

[corktownyuppie]

There are separate committees for the general fund and the police and fire fund. Whatever, I'm tired of worrying about it all and will just take things as they come. One thing for sure; the only people to come out ahead will be the attorneys pulling in four hundred bucks an hour.

Well, and the citizens getting lights fixed, blight removed, more cops, and better services.

[Wesley Mouch]

Well, and the citizens getting lights fixed, blight removed, more cops, and better services.

The best thing we can do to ensure full retirement payments is getting the City back and increase residents and number of taxpayers. That done, as Duggan clearly knows, the City can get back on its feet and stop being a 'ward of the state'.

When the City is back, we can do the right thing for our retirees and return to 100% payments -- perhaps even give out 13th payments or other special benefits -- because they had to take haircut when their city needed it.

[[Note: but we should adjust starting with the most vulnerable, low-pension/long years-of-service -- and never get to funding the $150,000 pension for someone who worked 3 years -- I exaggerate but you get the idea.)

[Honky Tonk]

Well, and the citizens getting lights fixed, blight removed, more cops, and better services.

Hopefully...

[jt1]

Well, and the citizens getting lights fixed, blight removed, more cops, and better services.

Most retirees have made it clear they don't give a damn about those wasteful services that the citizens of Detroit want.

Pay our pensions, fuck the citizens has been their rally cry.

[Eber Brock Ward]

Most retirees have made it clear they don't give a damn about those wasteful services that the citizens of Detroit want.

Pay our pensions, fuck the citizens has been their rally cry.

Yeah, "most" is true. But there are some good, decent people mixed in, and I feel bad for those people.

[cla1945]

Most retirees have made it clear they don't give a damn about those wasteful services that the citizens of Detroit want.

Pay our pensions, fuck the citizens has been their rally cry.

i have not seen nor have I heard one retiree voice those sentiments toward Detroit or the residents. The city deserves decent services but the retirees also deserve their pensions to remain intact. Personally, I didn't work 30 years for Detroit, only to have them reneg on their "obligation" to me. I had nothing to do with raiding city coffers, stealing funds, hiring family and friends, pay to play, Navigators, etc. That and many other things caused the city's demise; and to constantly blame retirees is irresponsible. Put the blame squarely where it belongs.

[poobert]

Most retirees have made it clear they don't give a damn about those wasteful services that the citizens of Detroit want.

Pay our pensions, fuck the citizens has been their rally cry.

Kindly show me one single source where that is said or even implied.

I do not work for the city and am a longtime resident of Detroit. I fully support given pensioners the vast majority of what they were promised along with maintaining city services.

Most people develop and emotional investment in their work. Why would someone give 30+ years of their life to serving the city and then wish for its demise?

These people are now old, living on a very modest income, and in many cases, can no longer work. Even if they could, who is going to hire them? Doing what?

I'm pretty sure what they are asking for is simply to get what they are entitled to in order to survive.

The same is true for the citizens of Detroit.

Now, the creditors on the other hand...they deserve a fair deal as well, but they're going to survive, and thrive, no matter what, unlike the other parties involved in the deal...they can take a bigger haircut, with as much as they have hurt this country already...

So that is where I stand.

[Honky Tonk]

Most retirees have made it clear they don't give a damn about those wasteful services that the citizens of Detroit want.

Pay our pensions, fuck the citizens has been their rally cry.

I hope I'm still around to hear what song you'll sing after you've busted-ass your whole life only to be screwed for it @ the end. These people are someones parents, family, and elderly, you're talking about. Give it a rest.

[cla1945]

Kindly show me one single source where that is said or even implied.

I do not work for the city and am a longtime resident of Detroit. I fully support given pensioners the vast majority of what they were promised along with maintaining city services.

Most people develop and emotional investment in their work. Why would someone give 30+ years of their life to serving the city and then wish for its demise?

These people are now old, living on a very modest income, and in many cases, can no longer work. Even if they could, who is going to hire them? Doing what?

I'm pretty sure what they are asking for is simply to get what they are entitled to in order to survive.

The same is true for the citizens of Detroit.

Now, the creditors on the other hand...they deserve a fair deal as well, but they're going to survive, and thrive, no matter what, unlike the other parties involved in the deal...they can take a bigger haircut, with as much as they have hurt this country already...

So that is where I stand.

Thank you for your support, what you said is absolutely true.

[Eber Brock Ward]

i have not seen nor have I heard one retiree voice those sentiments toward Detroit or the residents. The city deserves decent services but the retirees also deserve their pensions to remain intact. Personally, I didn't work 30 years for Detroit, only to have them reneg on their "obligation" to me. I had nothing to do with raiding city coffers, stealing funds, hiring family and friends, pay to play, Navigators, etc. That and many other things caused the city's demise; and to constantly blame retirees is irresponsible. Put the blame squarely where it belongs.

This is exactly what he/she is talking about.

You do realize that if the retirees get paid 100% then that's money that's not going toward roads, streetlights, cops, etc., right?

And that citizens have received far less than 100% for a long time?

Unless you clarify, you're part of the "most" of retirees that's the problem.

[Cincinnati_Kid]

jt1, I believe you started something here.

[Wesley Mouch]

i have not seen nor have I heard one retiree voice those sentiments toward Detroit or the residents. The city deserves decent services but the retirees also deserve their pensions to remain intact. Personally, I didn't work 30 years for Detroit, only to have them reneg on their "obligation" to me. I had nothing to do with raiding city coffers, stealing funds, hiring family and friends, pay to play, Navigators, etc. That and many other things caused the city's demise; and to constantly blame retirees is irresponsible. Put the blame squarely where it belongs.

Unfortunately, we what we 'get' isn't always what we 'deserve'.

We all live in a society. The health of that society matters a lot. Although you did your job, your society didn't. It takes a village, to quote HRC. The village failed you.

The lesson here is that if we want the fruit of our civic institutions, we must make sure that the institutions are sound and well managed. Otherwise, the 'obligation' isn't worth poo.

Detroit also had an obligation to police the streets, pickup trash, enforce codes, maintain streetlights, and keep tax rates reasonable. Detroit has failed on that obligation to its citizen much more than it will on its obligations to its pensioners.

Unions should take a lesson here. You can't kill your host.

One more thing... are the pension cuts going to be 'across the board'? So a pensioner getting $12,000 a year will take the same percentage cut as a pensioner getting $120,000 a year?

[corktownyuppie]

Thank you for your support, what you said is absolutely true.

I think there are two conflicts as an undercurrent with the conversations in this thread.

[[1) I think there is some natural resentment that pensioners are put on an equal playing field with unsecured debt [[and subordinate to secured debt).

This causes a problem because since the law sees it that way, putting $100 back in a pensioners pocket means that we have to put $100 into a bondholder [[or bond insurer's) pocket. So we have this shitty scenario where giving $100 to a pensioner costs $200 in city resident services.

[[2) I still think there are too many people who don't understand the finances of bankruptcy and conclude that it's simply a means to:

- screw the workers at the expense of the banks
- screw city employees and line the pockets of rich white people
- screw over the city and turn over control to the state
- screw over poor people and give all the cool jobs/real estate/power to hipsters.

It's not about any of those things. It's about IMPROVING CITY SERVICES BEFORE EVERYONE LEAVES THE CITY and then there's no money left for anyone.

That's the part people are not seeing. If the city doesn't screw over the creditors..and that includes -- to some extent -- pensioners -- everyone will leave...as they have been for 5+ decades...and then there's even less money than you're being offered now.

The one argument that I'd be willing to hear is that the State has an obligation to make pensionholders whole. But at what cost? I don't want to spend 7 years fighting about it, leaving the bankruptcy in limbo while everyone leaves.

A city's primary obligation is to provide services to its residents. Primarily public safety. You can make a good argument that education is right behind it.

Everything else is window dressing. Whatever results in the best increase in services for residents while staying within the confines of the law is where our focus needs to be.

[BankruptcyGuy]

The one argument that I'd be willing to hear is that the State has an obligation to make pensionholders whole.

Me, too. I'm guessing that one of the conditions of the $350MM from the state is release from any claims by pensioners against the state [[that's pretty standard).

Right now, we are at the "game of chicken" stage of this bankruptcy. If you are:

suburban water users--take the deal you're getting, or fight for a better deal and potentially get a worse one

Pensioners--cuts now, or bigger cuts later

Bondholders--cut a deal, or watch the other creditors cut better deals and get your return shrunk

I am interested to know if residents are seeing an uptick in services. Police/fire more responsive? Are city agencies better to deal with?

[cla1945]

Since when have the retirees become the bad guys in this bankruptcy? Just like the citizens of Detroit want better services, the retirees want what they deserve for the years worked. I wish I could have gone into the pension board and asked to see the books and protested how they were spending the money, but unfortunately, by the time any of us "older retirees" became aware of major problems, it was too late. Also, had I gone up to the pension board and demanded to see books, I would have been escorted out of the building on my ass.
To answer a question posed above, the pensioners will all receive an across the board cut. However, Police and Fire will receive a smaller cut than General City because they are two separate pensions and supposedly, one is better funded than the other, which is still being debated. I know of no one receiving $120,000/yr. pension either, although I'm sure KK may have arranged for a select few to receive that amount. If a general city pensioner is receiving $30,000/yr. pension, approximately $10,000 will be cut per year if they get the 34% cut. That's a huge hunk of money coming from a budget that is set for all bills.
Also, unions are not the cause of Detroit's financial woes.

[Smirnoff]

The police/fire retirees not only "earned" their pension risking their life, but contributed $$$ to it every week through payroll deduction.

The city needs to get creative, very....like opening 5 more casino's and/or creating a daily lottery to pay for their obligations!

[BankruptcyGuy]

To be clear, money contributed by pensioners and money already contributed by the city [[that is, money that is in the two funds) is not subject to the bankruptcy proceeding. What is being cut is the City's obligation to continue to pay money into that system, and the cuts advertised are estimates of what would need to be done to pension payments to keep the funds sound.

There are several ways to skin that cat, and I don't know where it's been written that the cuts are to be spread evenly across all beneficiaries or vested/non-vested employees. Perhaps someone can point me in the right direction.

For example, one possibility would be to cut pensions for younger pensioners more than for older ones. There are other permutations as well.

[Honky Tonk]

The police/fire retirees not only "earned" their pension risking their life, but contributed $$$ to it every week through payroll deduction.

The city needs to get creative, very....like opening 5 more casino's and/or creating a daily lottery to pay for their obligations!

Or, to start being more responsible with their spending.

[Wesley Mouch]

Since when have the retirees become the bad guys in this bankruptcy? Just like the citizens of Detroit want better services, the retirees want what they deserve for the years worked. I wish I could have gone into the pension board and asked to see the books and protested how they were spending the money, but unfortunately, by the time any of us "older retirees" became aware of major problems, it was too late. Also, had I gone up to the pension board and demanded to see books, I would have been escorted out of the building on my ass.
To answer a question posed above, the pensioners will all receive an across the board cut. However, Police and Fire will receive a smaller cut than General City because they are two separate pensions and supposedly, one is better funded than the other, which is still being debated. I know of no one receiving $120,000/yr. pension either, although I'm sure KK may have arranged for a select few to receive that amount. If a general city pensioner is receiving $30,000/yr. pension, approximately $10,000 will be cut per year if they get the 34% cut. That's a huge hunk of money coming from a budget that is set for all bills.
Also, unions are not the cause of Detroit's financial woes.

Who said they were bad guys. They aren't. But they also are wanted to be guaranteed all of their money. Understandable. But the citizens also need some of the money so their city can actually be a city with police, fire, trash.....

The pensioners do deserve to be paid the under-funded part of their pension. But there are other obligations that are also very important.

[Wesley Mouch]

The police/fire retirees not only "earned" their pension risking their life, but contributed $$$ to it every week through payroll deduction.

The city needs to get creative, very....like opening 5 more casino's and/or creating a daily lottery to pay for their obligations!

Smirnoff, why are unfunded pension obligations supremely more important than providing police coverage to residents?

The goal of the EFM/EM/bankruptcy is to reorganize the city's finances so they can pay everyone as much as they can. Everyone. Pensioners certainly very important. But so is keeping scrappers at bay. Or responding to residential B&Es.

Putting any one item at the supreme top of list is unfair to others. That's why some see pensioners as the 'bad guys'. Because they are almost along in insisting that the obligation to them is immutable and must be paid even if it harms others [[by things like service reductions and even more population loss).

[corktownyuppie]

Since when have the retirees become the bad guys in this bankruptcy? Just like the citizens of Detroit want better services, the retirees want what they deserve for the years worked.

Well, I don't think retirees are bad guys at all. I think they're just in a shitty position.

The one part that you have to remember is that if there are no citizens, then there won't be anyone to pay the pension payments. So like it or not, retirees are dependent on citizens, and therefore, those citizens needs to be met first...otherwise there won't be anyone to pay the pensions at all.

Cuts now, or worse cuts later. It sucks. It's not their fault. And the State might be on the hook for it.

But it's not about anyone being a "bad guy". It's about arithmetic.

[Hermod]

The bonds are not held by the EEEEEEEEEVULLLLLLLLL banks. The banks and invenstment houses just marketed the bonds. Most bonds are in other pension accounts [[which will be underfunded in case of a bond default) or are a part of individual retirement nest eggs.

[Ray1936]

To be clear, money contributed by pensioners and money already contributed by the city [[that is, money that is in the two funds) is not subject to the bankruptcy proceeding. What is being cut is the City's obligation to continue to pay money into that system, and the cuts advertised are estimates of what would need to be done to pension payments to keep the funds sound.

Bankruptcy Guy is one of the factual posters on this thread. It strikes me that many of you think that pension payments to pensioners comes out of the city general fund, period. And some of you think that police and fire personnel can just collect social security and medicare and be done with it all. And many of you think the retirees really don't give squat about the City of Detroit at all.

Strike three, and out.