Posted on 07/28/2013 5:30:55 AM PDT by SeekAndFind
Michigan's Attorney General Bill Schuette, a Republican, said on Saturday he would defend retirees who risk losing public pensions because of Detroit's bankruptcy, putting him at odds with the city's emergency manager appointed by fellow Republican Governor Rick Snyder.
Schuette, an elected official, said the Michigan state constitution is "crystal clear" in stating that pension plans are a contractual obligation that may not be diminished or impaired.
"Retirees may face a potential financial crisis not of their own making, possibly a result of pension fund mismanagement," Schuette said in a statement.
The attorney general said he would file in federal bankruptcy court on Monday on behalf of the pensioners affected by the biggest municipal bankruptcy filing in U.S. history.
A U.S. bankruptcy court judge on Wednesday dealt a blow to Detroit's public employee unions and pension funds opposed to the filing by suspending legal challenges in Michigan state courts while he reviews the city's petition for protection from creditors.
The city's unions and pension funds had hoped to keep the fight in state court, where they felt Michigan's constitutional protections of retiree benefits would prevail against any efforts by state-appointed Detroit Emergency Manager Kevyn Orr to scale them back.
Judge Steven Rhodes ordered three lawsuits filed by city workers, retirees and pension funds halted and said that applied also to suits against Orr as well as Michigan's governor and treasurer.
(Excerpt) Read more at news.yahoo.com ...
Lawyers have a higher obligation and this lawyer is living up to it. When the lawyers run the government, this is what happens.
The idea that these retirees don’t share the blame is just absurd. They voted in politicians promising benefits that any thinking adult knows would never be sustainable. Ignorance is no defense....
Those stupid pie-in-the-sky promises need to be nipped in the bud. They are about $9 billion of the $11 billion debt obligations.
I’m not sure if one can squeeze blood from a stone.
Idiot!! There are all KINDS of promises and contracts that NEED to be broken.
the account is drained; there is no money.
“http://dalekboi.tumblr.com/post/50407027361/brentwalker092-gay-legion-top-face-vs-bottom";
In the early ‘80’s my landlord was a retired alcoholic Detroit cop. He’d retired, he said, on full salary after 20 years. He told me about the good old days when they beat confessions out of people. He said he was getting more money now than when he was a cop as he got a raise every time his former coworkers did. I asked him how the city could continue to essentially keep every employee it had ever had on the roles forever. He never did answer that. As I recall, it was like bringing two south poles of a magnet together. He couldn’t even ask himself the question.
They have few services left because all the budget goes to salaries and pensions. Half the fire trucks and ambulances can’t run, the cops hardly go out unless it sounds really bad and then a 911 call can take an hour.
They can’t fix streets, can’t light the street lamps, the vast majority of parks are closed and have been since about 2008. Maybe they to recall some of those ex-cops and ex-park employees to come and work for those pensions if they are still abled.
The rest, in lieu of losing a portion of their pension, can take a free house of their choosing, they have about 75,000 abandoned properties, after all. Can’t afford to tear them down.
This is an easy fix, have an emergency vote and change the constitution. You ask the taxpayers in the rest of the state if they want to increase their taxes to pay for Detroit’s pensioners to change to constitution to reduce pensions no lower then what social security would pay.
“Maybe they to recall some of those ex-cops and ex-park employees to come and work for those pensions if they are still abled.”
Here’s the interesting thing. I’ve known several former public “servants” who have been retied and collecting significant checks for longer than they worked. I’ve never seen a group less interested in actually doing anything productive; rather they only pursue their own pleasure. I cautioned one that Connecticut was on the verge of bankruptcy and perhaps he should get a job. (He’s never saved even a modest amount, always having spent his stipend to the max. I suspect, because he expects to get it for the rest of his life, so why bother leaving any to the family? Seriously.) He was incensed that he should have to work. He’d already put in his twenty and the rest was for him. I’ve worked 36 years and I’d go to work tomorrow if a job was offered. (I was laid off in 2011; thank you Obama.)
Unbridled greed is, however, a very effective way to build bubbles, and when it's used to manage governments, those bubbles eventually pop like a brain aneurism.
Welcome to Detroit. Welcome to Amerika.
That is a rather complex solution
The easy fix is to have the President issue an executive order allowing the pension insurance board to take over responsibility and pay the retirees.
The retired are taken care of. Those on the payroll lose out.
The president is a hero
That is what will happen
RE: This is an easy fix, have an emergency vote and change the constitution.
Mark my words... they will ask Obama to rescue them (just like he did GM).
In the end, the rest of us pay for this.
Obama OWES the unions and he’s going to find ways to deliver.
The only problem with doing that is this sets a very bad precedent. What’s to stop the next bankrupt big city from doing the same?
And if they litigate all the way to the Supreme Courts, what’s to stop the left wing of the court from invoking “equal protection” (i.e., you protect Detroit, you’ll have to protect say, Philadelphia)?
RE: The easy fix is to have the President issue an executive order allowing the pension insurance board to take over responsibility and pay the retirees.
Next question — where will this pension insurance board get the money?
It maybe law, but the rest of us Smucks pick up the tab for Detroit's Theft, Corruption, and Insubordination? Are you kidding me?
Where is the X number of Billion that the Pensions are short going to come from @ the State Level?
We can't even get the Legislature to come up with a couple of Billion over 10 years to finally fix and upgrade Michigan roads?
Where is the magic bullet of inflows to the State Coffers to make this up? Are you going to "Frac" Michigan until it looks like a Spagetti Collander to get the tax revenue?
Dangerous precident here, just like GM and what they did with their Pensions and it will have set a template for other States.
Look I have been with firms that were going south and had the attenna up enough to know to get the heck out, So why should I hold the bag for these civil servants? Didn't they see it coming? If they don't have ERISA backing ( which I hear is correct ) maybe they need to self insure or purchase insurance on their pensions in the future. Once they see the rates on that, then maybe they will hire some Fiduciaries with some common sense...
If some court demands that Detroit pensioners’ pension funds must be “made whole”
(that the funds are legally owed ALL unfunded liabilities related to prior pension agreemnets)
then
THAT is something that can ONLY be accomplished
(a) gradually over time [not likely to be made whole immediately, in the short term, and maybe not in a decade) and
(b) with immediate and long term adjustments to the pensions of all new city employees (the same promises cannot be made to them)
OR ELSE the fiscal recovery of Detroit and its ability to eventually meet those obligations AND OPERATE will not be possible.
Meeting the unfunded obligations of pensioners already in the pension funds is only possible with a plan that ONLY expects to make them whole by the time all current unretired city employees in the plans actually retire, by closing all the current pension plans to new employees, and making lower pension promises to all new employees and using some of the savings to help pay off the underfunded pension liabilities the city did not pay enough on in prior years.
The city’s response to the attorney general should be clear, that it can only meet him one quarter of the way -
(1) past promises to people already in the plans will be meet,
(2) but that will only occur, financially, in time, over many years, possibly lasting until the last of those already in the plans retire, and
(3) all current pension plans will be closed to new employees; new employees will be given different pension plans with lower promises than what was made to city employees in the past.
——where will this pension insurance board get the money?-—
I really do not know but believe that employers with pension plans pay into the insurance. It now exists to protect corporate pensions from bankruptcies but that is not an obstacle for a President already gone wild to protect his union cronies.
See Oakland County to the North of Detwaa with their AAA bond rating and a 401a not a 401k, yes their is such a beast.
IMHO no more defined benefit plan for current and new Detwaa Employee's. Freeze the exisiting pension(s), get them new management ( Vanguard and all other low cost investment houses, are you listening ? ) and give them a 401k, 401a, 403bm 457, anything, but no more defined contribution plans period.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.