Detroit city workers, pensioners could face cut in retirement savings, too

[Vic01]

Interesting article. Sounds like it has a lot to do with those 13th monthly checks... Can anyone explain how that works? Sounds sort of like expecting five paychecks each month for only four weeks of work...

http://www.freep.com/article/2014040...nt-savings-too

[Packman41]

The article also touches on the annuity scheme that the GRS pension trustees mismanaged. They offered ACTIVE employees [[not RETIREES) the chance to "invest" in an annuity plan with above-market, rates of return [[7.0 to 7.9%) - all guaranteed by the taxpayers.

Unfortunately, when the pension trustees did NOT earn the guaranteed rate they took money out of an account, held in trust, meant only for RETIREES. In the last 5 years the trustees took out $532 million and paid it out to ACTIVE employees. That is, they robbed from Peter to pay Paul.

This all was detailed in a Detroit News article of September 6, 2013.

Problem now is how to get Paul to repay Peter and reverse the mismanagement. In the real world people would go to jail over this.

Meanwhile the pension trustees are playing CYA and will NEVER explain the truth of what they did to either the current, active employee or the retirees. Instead, they hide the truth and blame it all on someone else why the pensions will be cut.