Quote Originally Posted by professorscott View Post
We need to be precise when discussing this. The pension funds have assets, money. The assets of the pension funds are not included in the bankruptcy and will not be touched.

The concern is that the pension funds do not have enough - how much depends on whom you believe - to pay future obligations. That discrepancy is going to be the amount the pension funds have to fight for.

If you believe the claims of some that the pensions are fully funded, then you have to wonder what they're fighting about, since if they are fully funded they don't need any money out of the bankruptcy. But in any case, the actual money in the funds is not in any way up for grabs.
Actually, best to divide it into three parts:

1. Accrued liability for which there are assets in the pension funds. These are not even the subject of the bankruptcy by the most aggressive creditor's wildest imagination.

2. Accrued liability for which there are not assets in the pensions. In the Millender and other reports, these were called "UAL" -- unfunded accrued liability. This is where Section 24 of the Michigan Constitution and federal bankruptcy law may conflict. I think you could break this category into two sections, one for retirees and one for active employees, but there may not be a distinction there, depending on the terms of the funds.

3. Unaccrued liability--for current employees who are not vested. This is likely to go away. Based on what I've read, I would imagine the pension funds would be frozen.

Yes, more precise language is always helpful.