April 16 (Bloomberg) — Detroit’s two pension systems said they reached a tentative deal reducing cuts the bankrupt city’s emergency manager threatened to impose on retirees as part of its plan to shrink $18 billion in debt.

General employees’ pensions would shrink by 4.5 percent, instead of the 26 percent initially proposed by emergency manager Kevyn Orr, according to a person familiar with the settlement. They would lose an annual cost of living adjustment and anyone who may have been overpaid under retirement-related saving plans would be subject to a maximum 20 percent clawback, said the person, who asked for anonymity because the negotiations are confidential.

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