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.
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.