As reported by the ABI:
Detroit Emergency Manager Kevyn Orr laid out plans yesterday for changes to the city’s two retirement systems even as bankruptcy proceedings continue, Reuters reported yesterday. Orr, who was tapped by Michigan’s governor in March 2013 to run Detroit, said all current and new city workers will be subject to the changes effective July 1. The changes maintain a defined benefit system, but require new deductions from workers’ paychecks for pensions and matching contributions from the city. “The city and its labor partners have come up with what we think is the best option to strengthen employee pensions so we can continue to meet future obligations in a financially responsible and sustainable manner,” Orr said. Accrued benefits will be frozen as of June 30 and no new employees will be allowed to earn benefits under prior General Retirement System and Police and Fire Retirement System benefit formulas. Obligations toward Detroit’s pension systems are a major contributor to the $18 billion in debt and other expenses that led to the city’s historic municipal bankruptcy filing in July 2013. Detroit has about 22,000 retirees who currently receive pensions, but only about 9,000 active employees support the funds, according to Orr’s office.