May 2 (Bloomberg) — An association of retired public workers agreed to support Detroit's proposal to cut pensions as part of the city's plan to end its $18 billion bankruptcy, federal mediators involved in negotiations said in a statement.
The board of directors of the Detroit Retired City Employees Association voted to support the city's proposal that reduces pension and retiree health-care benefits, the mediators said. The association represents 8,000 retired city workers.
In order for the city to receive more than $800 million in state and private foundation money to shore up its two underfunded retirement systems, employees and retired workers have to vote in favor of the debt-adjustment proposal.
Recommended For You
Michigan's largest city filed for bankruptcy in July saying it couldn't meet financial obligations and provide adequate services. Since then, it's been negotiating with creditors including public pension systems and unions.
If enough city workers and retirees support the plan, police and firefighters would receive all of their normal monthly retirement payments, while general employees would see their monthly payments reduced by 4.5 percent. A previous version of the plan proposed cuts of 6 percent and 26 percent, respectively.
Other groups that have been more active in the city's bankruptcy, including a court-sanctioned committee of retirees and the boards that control the city's two pension systems, have already agreed to support the plan.
The case is In re City of Detroit, 13-bk-53846, U.S. Bankruptcy Court, Eastern District of Michigan (Detroit).
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
