Retirees and active employees of the city of Detroit’s two public pension plans have approved a plan that would provide for $816 million in public and private funds to shore up pensions while placing the collection of the Detroit Institute of Arts in a protective trust.
“This vote is recognition that all of Michigan has pulled together to support our state’s largest, and iconic, city and the people who work to protect and provide services to its residents,” says Gov. Rick Snyder. “We have farther to go down this road. But the vote tallies show how far we’ve come in the past year, and that Detroit’s future is increasingly brighter.”
Approximately 82 percent of the Police and Fire Retirement System retirees and active employees voted in favor of the city’s plan of adjustment, as did 73 percent of those in the General Retiree System.
Under the city’s plan, PFRS retirees and actives will see no cut in their monthly pension benefits and only a partial reduction in annual cost of living increases. GRS retirees and actives will see their monthly pension benefits reduced 4.5 percent along with the elimination of cost of living increases.
The approval was a necessary condition to obtain the $816 million — contributed by numerous foundations, the state, and donors of the Detroit Institute of Arts — to shore up pensions and lessen the cuts to retirees and active employees. In exchange for the DIA’s contribution, its collection will be placed in an irrevocable public trust and could not be sold to settle debts.
Looking forward, the city will begin the final phase of its bankruptcy with a trial set to start in federal district court on Aug. 14.
