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Judge Lifts Stay On Suit Over Extra Pension Checks

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DETROIT (WWJ/AP) - The federal judge overseeing Detroit’s bankruptcy petition has granted a union’s request to allow it to continue a fight for extra pension checks.

Judge Steven Rhodes decided Wednesday to lift an automatic stay on a suit by Michigan Council 25 of the American Federation of State, County and Municipal Employees (AFSCME).

In 2011, the City Council ended the pension system practice of issuing bonus checks. The union says that it should have been handled in collective bargaining.

A labor judge earlier ruled the City Council was wrong when it cancelled the practice of the so-called 13th check.

The General Retirement System says in an affidavit that it gave about $1 billion in payouts to active employees and retirees from 1985 through 2007.

State-appointed Detroit Emergency Manager Kevyn Orr says the city has underfunded obligations of about $3.5 billion for pensions and $5.7 billion for retiree health coverage.  He filed for Chapter 9 protection on behalf of Detroit in July.

judge Rhodes will determine later this month if the bankruptcy case can go forward.

MORE: Document Details Nearly $1B In Pension Payouts

[Detroit Bankruptcy: Complete Coverage]

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