Retirees Considering 'No' Vote on Grand Bargain

[corktownyuppie]

Union leadership is noticeably silent on the issue.

http://www.nextchapterdetroit.com/no...of-adjustment/

http://voiceofdetroit.net/2014/06/07...grand-bargain/

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Few questions:

[[1) Should the retirees fail to satisfy the requirements [[majority of voters, 2/3 of money represented in both classes, GRS and Police/Fire), is there enough of a majority of other creditors for Judge Rhodes to do a cramdown?

[[2) On appeal, when the appellate court reviews whether or not the Plan of Adjustment was fair and equitable, is it allowed to consider the Grand Bargain offer or any other settlement offer floated in mediation?

[[3) Up to this point, pensions cuts have not yet been put in force. When would that take place?

[Cincinnati_Kid]

They better take this deal. If they refuse, there will be far worse ramifications, especially involving pension cuts.

[Wesley Mouch]

Union leadership is noticeably silent on the issue.

http://www.nextchapterdetroit.com/no...of-adjustment/

http://voiceofdetroit.net/2014/06/07...grand-bargain/
...

I'm unclear on this. Do Unions have any obligation to support retirees? My impression has been that a gap between current workers and retirees was widening. They are competing groups.

The retirees want cash now to keep their benefits. The current workers know they'll never get a retirement nearly as good as current retirees -- so why should they support them.

Of course this kind of gap is exactly where Union leaderhip should be strong. Making a wise, informed decision and encouraging membership AND retiree support. And this is also exactly why the Unions need to be kicking in cash. It helps align everyone's interest.

[DetroitPlanner]

Dad met Friday with his old work buddies 8 out of 8 are voting for it.

[Chicago48]

Union leadership is noticeably silent on the issue.

http://www.nextchapterdetroit.com/no...of-adjustment/

http://voiceofdetroit.net/2014/06/07...grand-bargain/

========

Few questions:

[[1) Should the retirees fail to satisfy the requirements [[majority of voters, 2/3 of money represented in both classes, GRS and Police/Fire), is there enough of a majority of other creditors for Judge Rhodes to do a cramdown?

[[2) On appeal, when the appellate court reviews whether or not the Plan of Adjustment was fair and equitable, is it allowed to consider the Grand Bargain offer or any other settlement offer floated in mediation?

[[3) Up to this point, pensions cuts have not yet been put in force. When would that take place?

Retirees making less than $25,000 should be exempt.

[Wesley Mouch]

Retirees making less than $25,000 should be exempt.

Where are the progressives here who should be screaming this from the rooftop. The adjustment should be progressive. First $25,000 or so exempt from change, then say 50% on the rest until 100% when over $35,000.For gosh sake, let's be progressive.

[[And if that law doesn't allow that, its just plain wrong.

[Hermod]

Where are the progressives here who should be screaming this from the rooftop. The adjustment should be progressive. First $25,000 or so exempt from change, then say 50% on the rest until 100% when over $35,000.For gosh sake, let's be progressive.

[[And if that law doesn't allow that, its just plain wrong.

I don't think it is that there is a law against it so much that there will be court cases by the high rollers if everyone doesn't take an equal percentage cut. Possibly the union could show leadership for once and convince the retirees to have a "progressive" allocation of cuts.

[BankruptcyGuy]

[[1) Should the retirees fail to satisfy the requirements [[majority of voters, 2/3 of money represented in both classes, GRS and Police/Fire), is there enough of a majority of other creditors for Judge Rhodes to do a cramdown?

[[2) On appeal, when the appellate court reviews whether or not the Plan of Adjustment was fair and equitable, is it allowed to consider the Grand Bargain offer or any other settlement offer floated in mediation?

[[3) Up to this point, pensions cuts have not yet been put in force. When would that take place?

1. Yes. All that it takes is one approving class [[I think there are 12-15) and the judge can approved the plan over the objection of the dissenting classes.

2. That depends. I think by your question you're assuming that some Plan of Adjustment is in fact approved. Do you mean the current proposal [[assuming it's approved) or some other proposal [[assuming it's rejected and some other plan is approved)? If it's the former, objections and prior proposals are fair game. If it's the latter, they are less relevant. Nothing in mediation that didn't make it into the form of an approved plan [[or part of a plan) will be considered by the court.

3. In my opinion, whenever the city wants to. Recall that changes were proposed to go into effect in March, but the City pulled back, presumably because it was making progress in negotiations. I think there's very little question the City can scale back benefits today, only to then have a lawsuit be started [[or reinstated) immediately.

[BankruptcyGuy]

I'm unclear on this. Do Unions have any obligation to support retirees? My impression has been that a gap between current workers and retirees was widening. They are competing groups.

Move to the head of the class, as the old board game said. No, the unions have no legal obligation to support retirees. And yes, they have very competing interests. The retirees want a high level of benefits for current retirees. The unions want a high level of benefits for future retirees. I think we now all understand that this is a fixed pot of money. So the two hands reaching into the pot might be slapping at each other, so to say.

[BankruptcyGuy]

Where are the progressives here who should be screaming this from the rooftop. The adjustment should be progressive. First $25,000 or so exempt from change, then say 50% on the rest until 100% when over $35,000.For gosh sake, let's be progressive.

[[And if that law doesn't allow that, its just plain wrong.

It's unclear if such a plan would comport with PERA [[the state equivalent of ERISA). Since no one has cut benefits [[yet), it hasn't been tested. Clearly, a municipality can set up different benefit levels based on different years of service, age of party, etc.

This will likely be tested if/when Wayne County has to adjust its benefits. Recall the reported cases of ridiculously high benefit levels.

[That Great Guy]

We raised a small property tax for all of Wayne, Oakland and Macomb Counties to feed the animals at the Zoo and it passed. So, another tax exactly the same could be used to help pay the Detroit retirees.

And why not? It should not matter if your a monkey in the Zoo or a Detroit Worker. We should all work together and care about each other.

[corktownyuppie]

1. Yes. All that it takes is one approving class [[I think there are 12-15) and the judge can approved the plan over the objection of the dissenting classes.

Got it. Thanks.

2. That depends. I think by your question you're assuming that some Plan of Adjustment is in fact approved. Do you mean the current proposal [[assuming it's approved) or some other proposal [[assuming it's rejected and some other plan is approved)? If it's the former, objections and prior proposals are fair game. If it's the latter, they are less relevant. Nothing in mediation that didn't make it into the form of an approved plan [[or part of a plan) will be considered by the court.

I see. So my understanding is that the status quo goes like this:

- Enough creditors are on board to cramdown the decision
- If the pensioners don't approve the deal, the Grand Bargain fails, and the $1 Billion Disappears.
- But just because the Grand Bargain is gone doesn't mean that the Plan of Adjustment is nixed. It just means that there's less money to go around.
- And I got the answer to my question. If the pensioners reject the deal, the appellate court can consider the fact that the Plan of Adjustment allowed them to receive much smaller cuts and that they elected not to take the deal when trying to determine whether or not the PoA is fair and equitable.

3. In my opinion, whenever the city wants to. Recall that changes were proposed to go into effect in March, but the City pulled back, presumably because it was making progress in negotiations. I think there's very little question the City can scale back benefits today, only to then have a lawsuit be started [[or reinstated) immediately.

I sure wonder how this ballot would look if the pay cuts had already been put into place. "Just sign here, and we will retroactively pay you the money owed, and keep your benefits mostly intact going forward."

[corktownyuppie]

We raised a small property tax for all of Wayne, Oakland and Macomb Counties to feed the animals at the Zoo and it passed. So, another tax exactly the same could be used to help pay the Detroit retirees.

And why not? It should not matter if your a monkey in the Zoo or a Detroit Worker. We should all work together and care about each other.

Part of the problem is that most believe that everyone should have to sacrifice, including the pensioners. Although the benefits weren't too unreasonable, some of the practices are just downright ridiculous.

If you want a world where you can take an extra 13th check when times are good, then that same world should force you to give back the 12th check and take less money when it's a tough year.

Not to mention that the precedent would be a gigantic mess. If every municipality facing a pension shortage could count on a taxpayer bailout, we'd be in a real mess. The good thing out of all of this is that cities that have been kicking the can down the road are finally going to have to fix some of their problems.

I'm not saying pensioners should take all the blame or even a majority of the blame. But I can't support a total bailout of the pensioners. And this is coming from someone who both lives in the city and whose father is receiving a monthly pension.

I don't a see any plausible scenario where you convince Wayne, Oakland, and Macomb to chip in.