DETROIT (WWJ/AP) – Trustees who oversee a Detroit pension fund have voted in favor of a 4.5 percent cut for thousands of retirees.
Trustees meeting Wednesday supported a deal reached Tuesday between negotiators and the city of Detroit. It’s part of the city’s plan to eventually emerge from bankruptcy.
The General Retirement System covers retirees outside of the police and fire departments.
Besides a pension cut, retirees will be asked to give up annual cost-of-living payments. Retirees and Detroit’s active employees who qualify for a pension will vote. The plan must also be approved by federal bankruptcy judge Steven Rhodes.
Pension fund spokeswoman Tina Bassett says it’s the best possible deal.
“You know, there’s been a lot of uncertainly and anxiety among our members and retirees, and the board felt it was their responsibility to bring to our members and retirees the best possible deal with the best possible outcome for their consideration,” said Bassett.
Bassett told WWJ Newsradio 950’s Stephanie Davis they still have to negotiate some details before the deal is done, but this was the biggest component.
Detroit says cuts are necessary because the fund is underfunded.
Police and fire retirees are covered by a different pension fund. They wouldn’t see any pension cuts under the plan — only a modest reduction in annual inflation payments.
Detroit Emergency Managery Kevyn Orr filed for Chapter 9 protection on behalf of the city last July. The city hopes to emerge from bankruptcy in October of this year.
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