Pension Settlement Coming Soon?

[jt1]

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.

1. I don't think anyone here has stated that pensions come from the general fund however, the city is liable for shortages in the pension fund.

2. I think it is clear that PD and FD don't get SS however the cuts proposed are only 10% and may go as low as 6% so we are all cognizant of the fact that PD and FD are looking at relatively small cuts.

3. There are retirees that don't give a squat about the city. Hell, one even commented in the Free Press [[or News): Michigan is magnificent, too bad it has Detroit for a sewer. You can say what you want here but your bs posts on the local papers tell me about your real opinion. Unless of course it is a sheer coincidence that there is another Ray from Henderson that has a picture as a motorcycle cop form back in the day posting bs in response to local articles.

Which face is the correct Ray? The one here or the one posting responses to articles in the FP/News?

[cla1945]

1. I don't think anyone here has stated that pensions come from the general fund however, the city is liable for shortages in the pension fund.

2. I think it is clear that PD and FD don't get SS however the cuts proposed are only 10% and may go as low as 6% so we are all cognizant of the fact that PD and FD are looking at relatively small cuts.

3. There are retirees that don't give a squat about the city. Hell, one even commented in the Free Press [[or News): Michigan is magnificent, too bad it has Detroit for a sewer. You can say what you want here but your bs posts on the local papers tell me about your real opinion. Unless of course it is a sheer coincidence that there is another Ray from Henderson that has a picture as a motorcycle cop form back in the day posting bs in response to local articles.

Which face is the correct Ray? The one here or the one posting responses to articles in the FP/News?

There are more than 23,000 retirees. I have never heard a comment like that one. I've read other comments on this forum about Detroit from supposed residents that makes the sewer comment you allege sound like a fairy tale.

[Hermod]

I think that we all realize that the pension fund suffers from an excess of friends and family administrators who pocketed their share and also made "socially responsible" investments instead of prudent investment thus leaving shortfalls in the funds.

The pension funds have also been victimized by the city not contributing their share to the funds due to the need to pay for the high living of the connected.

The situation has to be corrected. What is the size of the pension that can be paid by the current balance in the funds after deductions for corruption and favoritism?

[Cliffy]

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.

You might want to think your Republican beliefs. The Democrats are the only ones stepping up and defending the pensions. Yet, you are Mr. Big Shot industrialist Republican. Now you got fucked by the people you keep voting for.

[Wesley Mouch]

You might want to think your Republican beliefs. The Democrats are the only ones stepping up and defending the pensions. Yet, you are Mr. Big Shot industrialist Republican. Now you got fucked by the people you keep voting for.

Depends on what really 'defends' pensions. Demanding 100% payment from a broke city doesn't really pay anyone a pension. It just ensures failure.

Reorganizing the city's finances as Snyder and Co. are bravely doing is what will really enable future pension payments AND a viable city.

I don't see democratic bravery. I see pandering and continuing with failure.

[corktownyuppie]

Depends on what really 'defends' pensions. Demanding 100% payment from a broke city doesn't really pay anyone a pension. It just ensures failure.

Reorganizing the city's finances as Snyder and Co. are bravely doing is what will really enable future pension payments AND a viable city.

I don't see democratic bravery. I see pandering and continuing with failure.

Yeah, you can accept 75% and get it, or you can demand 100%, drive everyone away and end up with 50%.

That said, reading the pensioner letters is certainly persuasive. The key though is that the anger is misdirected. The constitutional protection from pensions isn't by the city, it's by the state.

Instead of blaming the city or the EM whose #1 concern is the city's future, my focus would be on persuading the state legislature, Judge Rhodes, and Judge Rosen.

[Wesley Mouch]

Yeah, you can accept 75% and get it, or you can demand 100%, drive everyone away and end up with 50%.

That said, reading the pensioner letters is certainly persuasive. The key though is that the anger is misdirected. The constitutional protection from pensions isn't by the city, it's by the state.

Instead of blaming the city or the EM whose #1 concern is the city's future, my focus would be on persuading the state legislature, Judge Rhodes, and Judge Rosen.

I think the pensioners should settle -- with an exclusion that let's them chase the State for the cash. The citizens of the state allowed a provision to protect pensions. So they should pay. But at the same time, Detroit shouldn't be held down and screwed while trying to stand up and be a real city. You're right, CTV, the anger is misdirected.

Snyder and the State should tax its citizens for the Detroit pension shortfall [[maybe adjusted for their own self-inflicted abuse) -- and then demand that the law be changed. The State should not guarantee the pensions of cities that underfund and overpromise. That's a formula for every troubled city in the state [[and country) to dive head-first into bad behavior.

So Michigan, let Detroit settle with pensioners. Tax all state citizens for the shortfall. Fix the law for the future to hold cities responsible for the messes they create.

[mwilbert]

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.

It is doubtful many of the bonds are held in pension funds or retirement accounts, as that would be stupid--you lose the benefit of the tax exemption if the bond is held in a tax-deferred account. Of course, there are people ill-informed enough to put munis in such an account, but it can't be common. Most of the bonds are almost certainly held either directly or indirectly by the people most benefited by their tax status--high income individuals. Those people may well be holding them for retirement, but they can probably take the hit fairly easily unless they got very bad advice about diversification. There could also be some corporate ownership, and there are probably also some speculators hoping that the bonds may end up paying more than the markets expect.

[313WX]

3. There are retirees that don't give a squat about the city. Hell, one even commented in the Free Press [[or News): Michigan is magnificent, too bad it has Detroit for a sewer. You can say what you want here but your bs posts on the local papers tell me about your real opinion. Unless of course it is a sheer coincidence that there is another Ray from Henderson that has a picture as a motorcycle cop form back in the day posting bs in response to local articles.

Which face is the correct Ray? The one here or the one posting responses to articles in the FP/News?

Amazing how we can wear so many different masks on the internet.

[Cincinnati_Kid]

I think the pensioners should settle -- with an exclusion that let's them chase the State for the cash. The citizens of the state allowed a provision to protect pensions. So they should pay. But at the same time, Detroit shouldn't be held down and screwed while trying to stand up and be a real city. You're right, CTV, the anger is misdirected.

Snyder and the State should tax its citizens for the Detroit pension shortfall [[maybe adjusted for their own self-inflicted abuse) -- and then demand that the law be changed. The State should not guarantee the pensions of cities that underfund and overpromise. That's a formula for every troubled city in the state [[and country) to dive head-first into bad behavior.

So Michigan, let Detroit settle with pensioners. Tax all state citizens for the shortfall. Fix the law for the future to hold cities responsible for the messes they create.

Are you kidding me? The first thing Snyder did when he was elected was taxing pensions, so now you're saying the same people he just started taxing should be taxed again, just to save the Detroit pensioners who just got screwed? Unless you're talking about taxing the people that haven't retired and are still working, this won't fly. A poll was just taken from Michiganders asking what was the most unpopular decision Snyder has made since he was elected, and taxing pensions was #1 on the list. You're trying to start a war with that crazy idea.

[Wesley Mouch]

Are you kidding me? The first thing Snyder did when he was elected was taxing pensions, so now you're saying the same people he just started taxing should be taxed again, just to save the Detroit pensioners who just got screwed? Unless you're talking about taxing the people that haven't retired and are still working, this won't fly. A poll was just taken from Michiganders asking what was the most unpopular decision Snyder has made since he was elected, and taxing pensions was #1 on the list. You're trying to start a war with that crazy idea.

The state has guaranteed the pensions. How else does the state raise money but taxes?

[[Your #1 unpopular Snyder decision shows how hard tax reform is. Everyone wants to protect their special little gift. I still don't see why municipal pensioners are special and GM pensioners are not. Why not give every equal pensioner tax freedom.)

[Hermod]

It is doubtful many of the bonds are held in pension funds or retirement accounts, as that would be stupid--you lose the benefit of the tax exemption if the bond is held in a tax-deferred account. Of course, there are people ill-informed enough to put munis in such an account, but it can't be common. Most of the bonds are almost certainly held either directly or indirectly by the people most benefited by their tax status--high income individuals. Those people may well be holding them for retirement, but they can probably take the hit fairly easily unless they got very bad advice about diversification. There could also be some corporate ownership, and there are probably also some speculators hoping that the bonds may end up paying more than the markets expect.

I just read in the paper this morning. 45% of all state and local bonds are held by individuals and 28% are held by muni bond mutual funds.

[mwilbert]

I just read in the paper this morning. 45% of all state and local bonds are held by individuals and 28% are held by muni bond mutual funds.

Yes. As I said. But not in pension funds and not in retirement accounts.

[Hermod]

Yes. As I said. But not in pension funds and not in retirement accounts.

Retirement nest eggs which would be depleted by a default.

[mwilbert]

Retirement nest eggs which would be depleted by a default.

Clearly a default will hurt the owners of the defaulting asset. But the owners of these bonds are not poor people who can't deal with it. I lost money on the WPPS muni default back in the 80's. Was I happy? No, but it wasn't that big a deal either, because it was only a small part of my portfolio. I can't imagine very many people have a significant amount of their savings in Detroit GOs. If they do, I won't say they deserve to lose it, but they either got terrible advice or shouldn't be running their own money.

[Hermod]

Clearly a default will hurt the owners of the defaulting asset. But the owners of these bonds are not poor people who can't deal with it. I lost money on the WPPS muni default back in the 80's. Was I happy? No, but it wasn't that big a deal either, because it was only a small part of my portfolio. I can't imagine very many people have a significant amount of their savings in Detroit GOs. If they do, I won't say they deserve to lose it, but they either got terrible advice or shouldn't be running their own money.

Not the GOs, how about the DWSD revenue bonds?

[mwilbert]

Not the GOs, how about the DWSD revenue bonds?

On the one hand, it doesn't matter--people shouldn't have a big chunk of their assets in either one. On the other hand, I specified the GO's because they are virtually certain to take some kind of hit. I haven't seen anything that makes me think that DWSD revenue bonds are at risk from the bankruptcy, although they aren't rated so highly that investors should be assuming that they are safe in general.

[Hermod]

On the one hand, it doesn't matter--people shouldn't have a big chunk of their assets in either one. On the other hand, I specified the GO's because they are virtually certain to take some kind of hit. I haven't seen anything that makes me think that DWSD revenue bonds are at risk from the bankruptcy, although they aren't rated so highly that investors should be assuming that they are safe in general.

I think most of the DWSD revenue bonds are insured as well. They are still trading at or above par.

[Islandman]

OK, serious question:

So, most pensioners, I'm sure, have been keeping up with current events in Detroit.

At what point do they realize or accept that that the city has been going downhill for the last, let's say, 40 YEARS. What sort of magic did they think was going to protect their pension benefits?

Unless you are a pensioner that has been out of the game for a minute, perhaps Ray1936 and for certain my grandmother, born in 1929 and no internet, have you seen anything on the news that has given you comfort as to the stability of the pension system in Detroit?!?

Seriously, it's been a car accident waiting to happen. Anyone who has retired in the last 40 years should have seen this coming, slowly but surely.

Yeah, it fucking sucks, but should not be a surprise to anyone.

[Cincinnati_Kid]

The state has guaranteed the pensions. How else does the state raise money but taxes?

[[Your #1 unpopular Snyder decision shows how hard tax reform is. Everyone wants to protect their special little gift. I still don't see why municipal pensioners are special and GM pensioners are not. Why not give every equal pensioner tax freedom.)

The bankruptcy trumped the pensions being guaranteed or haven't you heard?

[corktownyuppie]

Yes he did. I think the point he was making was the same as mine. If someone is upset at the pension cuts...aim your fire at the state, not the city...since they were the ones who guaranteed the benefits.

[Cincinnati_Kid]

Yes he did. I think the point he was making was the same as mine. If someone is upset at the pension cuts...aim your fire at the state, not the city...since they were the ones who guaranteed the benefits.

And I agree with you on that. The state is responsible for making the pensioners whole inspite of the Detroit bankruptcy, but they seem to be dragging their feet to me. The 300 million that they proposed isn't nearly enough, but it's a start I guess. I disagreed with Mouch suggesting to tax people more especially seniors when they are already being taxed up the gazoo.

[Hermod]

Did the state guarantee the pensions or did the state decree that its political subdivisions could not diminish the pensions?

If the pensions are diminished does the state have to pony up the money or does it decree that Detroit must pony up the money?

If the state has to do it, I can see a lot of cities and counties ready to dump it all on the state.

[Cincinnati_Kid]

Your guess is as good as mine. If the pensions are protected by the state constitution as mandated, then they are responsible, if not as the bankruptcy lawyer says, then I guess not. We will soon find out.

[mwilbert]

And I agree with you on that. The state is responsible for making the pensioners whole inspite of the Detroit bankruptcy, but they seem to be dragging their feet to me. The 300 million that they proposed isn't nearly enough, but it's a start I guess. I disagreed with Mouch suggesting to tax people more especially seniors when they are already being taxed up the gazoo.

Where is the state supposed to get the money to make pensioners whole without taxing someone?