Detroit has a GUN pointed at it's HEAD - Debt Crisis in 2024

[coracle]

It’ll be The State/Suburbs having the gun pointed at it’s HEAD and Detroit will be doing the pointing.

[Wesley Mouch]

For what it's worth.....police and fire personnel were exempted from social security if they paid into a municipal pension fund. Thus, Detroit police and fire retirees may not only lose their pensions, but they do not qualify for social security and medicare health coverage. But who gives a care?

Am I correct that DPD did not contribute to SS because their plan was designed to be better, and the officers preferred a separate, stronger plan?

[O3H]

Basically it's theft

https://pbs.twimg.com/media/DYH6L29U0AI8FsN.jpg:large

[Ray1936]

Am I correct that DPD did not contribute to SS because their plan was designed to be better, and the officers preferred a separate, stronger plan?

City just mandated it in the 1930's when Social Security was established by FDR. The Police and Fire pension fund was already in place for decades; and the SS bill permitted state and municipal employees the right to maintain their own pensions and forgo payment into SS. Kind like the egg was there before the chicken. Both employee and the city paid 5% of their salaries into the pension fund. At that time it was much more expensive than contributing to social security. Not so much today.

[Wesley Mouch]

City just mandated it in the 1930's when Social Security was established by FDR. The Police and Fire pension fund was already in place for decades; and the SS bill permitted state and municipal employees the right to maintain their own pensions and forgo payment into SS. Kind like the egg was there before the chicken. Both employee and the city paid 5% of their salaries into the pension fund. At that time it was much more expensive than contributing to social security. Not so much today.

Thanks, Ray. Its hard to think of SS as a new-fangled think, but in some ways it is.

City-run pensions are a little like fox-run henhouses. Bad idea. SS can't really steal money -- but smaller unions and municipalities can. Maybe not literally steal, but they might 'loan' or 'invest' pension funds in 'creative' ways that are more fox-like than chicken-centric.

[DetroiterOnTheWestCoast]

This is not directly related to the pension funding issue, but its nice to see that the city used some of its surplus to pay other debt down early, thereby saving future interest expense.

The city of Detroit on Wednesday used $54.4 million in surplus funds to pay off bonds issued when the city exited bankruptcy in 2014 to settle debts with bond insurers on pension-related debt.
Detroit's move to pay off the remaining principal and interest owed on $88 million in 12-year Financial Recovery Bonds will save the city $11.7 million in interest over eight years, said John Hill, chief financial officer for Detroit.

http://www.crainsdetroit.com/article...-8-years-early