Gov. Rick Snyder has "the ultimate responsibility" for protecting Detroit retirees, an editorial says. (Michigan Municipal League photo)
The other shoe has dropped for 23,500 former City of Detroit workers, as a Free Press editorial puts it.
Detroit retirees have been waiting to find out not if, but how badly, they’d be hurt under the city’s reorganization plan. The court documents filed Friday finally answered that question: pretty badly.
Pensioners drawing benefits from the city’s General Retirement System would get hit with a 34% cut to pension benefits, even after an influx of cash from a grand bargain between the state, the Detroit Institute of Arts and a handful of philanthropic foundations. . . .
The average general system retiree’s pension is about $19,000 a year. A 26% cut would mean that meager income drops to $14,060 a year. That’s $1,171 a month. . . .
The City of Detroit, with the full approval of Gov. Rick Snyder, is preparing to tell thousands of Detroit retirees that this is what their years of service, hard work and planning amount to: $1,171 a month.
Police and fire retirees, covered under a separate system, would see pension checks shrink 10%. (They're ineligible for Social Security, unlike the city's other retirees.)
The Official Committee of Retirees says the plan would cause 20 percent of city pensioners to live below the federal poverty line over the next 10 years, Detroit News columnist Daniel Howes writes.
"It's unacceptable," the Freep says under the headline "Too much pain for pensioners." Its editorial notes that "the Michigan Constitution protects pensions," though Bankruptcy Judge Steven Rhodes has ruled that federal courts can alter such contracts.
The ultimate responsibility for making Detroit pensioners whole still rests with Snyder.
