-- Police and fire retirees face smaller cuts of up to a 10% cut, according to the proposed bankruptcy blueprint filed Friday morning. On a
-- The plan also eliminates cost of living adjustments for pensions in the future.
But retirees need to know that the early numbers are not final. The plan released today also said that the cuts proposed would be reduced if the pension funds agree to a
-- For police and fire retirees, for example, the cut could drop to 4% if both funds agree to the settlement.
-- For the general city retirees, the cut could drop to 26% if there's a timely settlement.
"We really do not have time for a lot of acrimony and litigation," Orr said in a conference call Friday.
"All of this hinges on a negotiated solution."
The proposed cuts differ because the police and fire plan is better funded, so it has more money to back pension promises for its retirees into the future.
The bankruptcy blueprint filed Friday states the general retirement system is underfunded by
For retirees, it is too early to tell just when pension checks would be reduced.
The plan of adjustment Orr filed Friday amounts to a proposed blueprint for remaking the city and its service delivery. It is a first proposal and will undergo scrutiny from negotiating parties and could change. A final plan ultimately must be approved by bankruptcy Judge
Orr said in the phone conference that the plan for help the poorest pensioners would be aimed to help those who worked at lower wages.
Experts had suggested that it might be possible to protect those who receive the smallest pensions, such as those whose pensions put them close to the poverty level. The theory was that those top managers who received the richest pension payouts could better afford to take deeper cuts.
Under the plan, additional benefits will be provided to all retirees, police, fire and general retirees, who "are most in need," the plan said.
Reduced cuts would be offered to those with a household income less than a set amount, an amount that has yet to be determined, the plan said. The income threshold is subject to ongoing negotiations and will be tied to federal poverty levels, according to Orr's plan.
Other changes are proposed, too, including:
-- As for active police and fire employees, the pension cuts would include the elimination of the deferred retirement option plan feature of police and fire system retirement plan, plus the reduction of up to 10% in the monthly pension amount.
-- The plan also noted that it is possible, based on language in the blueprint, that further cuts might take place if the plans are more underfunded this year.
The plan stated that further reductions would take place in the event the unfunded liabilities for the police and fire retirement system ending
The plan noted the reduction in the monthly pension amount shall be increased to the extent necessary to ensure that there is no change in the amount of underfunding between plan years ending 2013 and 2014.
-- The pension freeze for existing city employees would take place as
Orr ordered a pension freeze of the city's General Retirement System late last year in an effort to stabilize the fund and allow the city to spend available money on services. But he decided a week later to stay the freeze.
Talks will continue after Friday's announcement.
She said the plan of adjustment is a "dynamic document." But she expressed concern that it "contains debilitating and unnecessary cuts to accrued pension benefits."
"The city can afford much better treatment to the people who have dedicated years of their lives in service of the city," Bassett said.
Living on edge
About 24,000 city retirees have lived on edge for more than eight months on the road to
Many retirees say they live on limited budgets as it is already. The average general system retiree's benefit is less than
Retirees are having to absorb increased health costs, starting
Emergency Manager Orr has maintained
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