Why can't Detroit [[and other government units) and corporations

[emu steve]

My $0.02:

The assets of the two pension funds are indeed titled in their own names: Police and Fire Pension System of the City of Detroit, and the General Retirement System of the City of Detroit.

No, those assets are not subject to seizure or sale or anything else to pay the creditors of the City of Detroit.

There are two obligations under consideration, each of which might have a different status as far as the Michigan Constitution is concerned: a) the difference between what the retirees are getting paid right now and the amount of assets in the funds today, b) the City's obligation to pay into the funds for amounts that aren't due under [[A) now, but may be in the future, and c) the City's continuing obligation to pay into the pension fund for existing employees. My best analogy is sending two kids to college, one that’s in college and one still in middle school. You may have set aside money to pay for the 1^st kid’s college, but you know that pot is short as of today. That shortfall may get worse as conditions change, and you're on the hook for that, too. And you also need to be putting something aside for your 2nd child.

Obligation A is the underfunded portion. I don't think the pension funds are thinking straight when they are arguing with Orr's calculations--generally creditors want to make the debt look as large as possible.

Obligation B is a question of who takes the risk going forward. GM successfully offloaded this risk by funding an annuity with a private insurer. Would the City? The State?

Obligation C is a question of whether the City is required to keep adding to the pension fund going forward. That answer is more likely than not “no”.

You answered my main question, namely, are funds deposited [[held) for current and future retirees safe from seizure in a bankruptcy.

The question, then, becomes how are the pension fund[[s) going to get the additional income stream, other than investments, needed to pay current and future retirees?

In other words, it isn't about ASSETS but about INCOME [[other than investments) needed to grow those assets to met retiree payments.

Correct?