Inside Detroit- In a courtroom in the City of Detroit, WXYZ is reporting Judge Steven Rhodes declared Detroit eligible for Chapter 9 bankruptcy protection. With unfunded liabilities attached to Detroit retirees pensions, the ruling today paved the way to address whether to cut the pension amounts retirees receive.
Bloomberg.com tells a different tale of the retirees income related to their pensions.
Edna Love’s 58 years as a nurse for Detroit’s health department earned her a $2,000-a-month pension when she retired in 2011. That pales next to the $1 million she got from a separate city-sponsored savings plan where she put 5 percent of her pay year after year.
At some point, City of L.A. and L.A. County employees enjoyed a generous deferred compensation plan as well. Unfortunately, those plans are no longer available, with the same financial benefits, to incoming employees. In fact, government employees have seen increased contributions towards their retirement, for some government employees don’t pay into Social Security, their pensions will be all they have to live off.
Will today’s ruling in Detroit be replicated in Chicago and other cities across the nation, who also face the obstacle of addressing their unfunded pension liabilities?