Detroit Cuts Deal With Retired Police and Firefighters

The city going through one of the largest bankruptcies in U.S. history has agreed to preserve pension benefits for some retired civil servants even as it announces cuts for other employees

Detroit has reached a deal with some retired workers over pension benefits, but cut monthly payments for other former employees, in a move that could give a boost to the city's plan to exit bankruptcy in October, officials said Tuesday.

According to tentative agreements, retired police officers and firefighters will continue to receive their pensions while those who do not work in public safety will have some of their benefits scrapped.

There will be a 4.5 percent cut and an elimination of the cost-of- living payments for the general fund pensioners, said Tina Basset, spokesperson for the fund.

The agreement will cover more than 20,000 retired workers in a city going through one of the largest public bankruptcies in U.S. history. Both the retirees, as well as current workers who qualify for a future pension, will be allowed to vote as creditors in the bankruptcy.

Retired Detroit Police and Fire Fighters Association attorney Ryan Plecha said preserving the pension benefits was the 'crown jewel.'

Bill Nowling, a spokesperson for Detroit emergency manager Kevyn Orr, who is overseeing the bankruptcy process, said the deal with retired workers had been possible because of an improved financial performance of the pension funds.

However, both deals depend on the $816 million that Detroit is hoping to raise from foundations, philanthropists and the state of Michigan. Lawmakers are yet to approve Michigan's $350 million contribution.

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