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Pontiac Retirees Could Lose Benefits Under Deficit Elimination Plan

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CBS Detroit (con't)

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PONTIAC (WWJ) - Roughly 1,200 city of Pontiac retirees are at risk of losing their health care benefits — as a funding tug-of-war continues between the city’s outgoing emergency manager and public employee pension board.

EM Louis Schimmel contends funding for retiree care should come from the pension fund’s $150 million budget surplus, not the city’s general fund budget.

“They’re saying I have no business to deal with them because they’re a separate entity, and they’re absolutely correct. And I’m making it very clear that the city doesn’t have the funds,” he said.

“I’ve already not put that in my budget. So, fiscally, it’s fixed from that standpoint,”  Schimmel said. “The issue now is, is the pension board gonna step up and use this over-funding to take care of retirees so that they don’t lose the present benefits that they have? That’s going to be up to them.”

Schimmel said the plan will save Pontiac $6 million a year — roughly the amount of the city’s deficit.

Pontiac Mayor Leon Jukowski said the new plan makes financial sense.

“I think it’s the only option at this point. I mean, I just do not see why you wouldn’t take $150 million in excess funding and see if you can’t use it to benefit the members of the retirement system,” Jukowski said.

WWJ Newsradio 950 has reached out to members’ of the Pontiac Pension board, including Chairman Charlie Harrison for comment. The board has previously voted against the idea of using excess funds.

Schimmel said, the way he sees it, the debate is over. His reign in Pontiac will end within the next 60 days.

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