Detroit's Retirees Pay Could Be Cut ; Bankruptcy Includes Pensions

By Karoub, Jeff | Evansville Courier & Press (2007-Current), July 24, 2013 | Go to article overview

Detroit's Retirees Pay Could Be Cut ; Bankruptcy Includes Pensions


Karoub, Jeff, Evansville Courier & Press (2007-Current)


DETROIT - K. D. Bullock had been retired from the Detroit Police Department for nearly 17 years and was working as a casino security supervisor when he encountered a problem last March - long accustomed to working on his feet, he suddenly couldn't make it up a flight of stairs. After months of doctor's appointments, he was diagnosed with rheumatoid arthritis, which makes it difficult for him to breathe. He not only left his job but had to begin paying others for the fix-up work he'd been doing on his historic six- bedroom house. Now, he could be facing another hit, this time to his $2,400-a-month pension.

The pensions earned by more than 21,000 retired municipal employees have been placed on the table as Detroit enters bankruptcy proceedings with debts that could amount to $20 billion. Labor unions insist the $3.5 billion in pension benefits are protected by state law, but the city's emergency manager has included them among the $11 billion in unsecured debt that can be whittled down through bankruptcy. A federal judge has scheduled the first hearing on the city's case for today.

The prospect of sharply reduced pension checks has sent a jolt through retired workers who always counted on their pensions - who sometimes sought promotions just to sweeten the pot - and never imagined they could be in danger even as the city's worsening finances finally led to its bankruptcy filing last week.

Bullock says he's worried he'll have to sell his home in Detroit's historic Indian Village neighborhood, and others are wondering if they can afford a house at all.

"A number of things can happen. It just means our lifestyle is going to change - we have no way of knowing," Bullock said of the choices facing him and his wife, Randye.

The average annual pension payment for Detroit municipal retirees is about $19,000. Retired police officers and firefighters receive an average of $30,500. Top executives and chiefs can receive $100,000. Police and fire-fighters don't pay into the Social Security system so they don't receive Social Security benefits upon retiring.

Bullock, 70, said the idea that his pension could be reduced is "a hard pill to swallow" after 27 years on the force working his way up. He said he was proud to be the first black commanding officer of the department's communications system.

He said that pensions - and people - should be a priority over other city assets, such as artwork at the Detroit Institute of Arts, some of which could be sold to help satisfy the city's staggering debts. But art patrons have protested the idea of auctioning off Old Masters in the museum collection. …

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