-- Police and fire retirees face up to a 10% cut, according to the proposed bankruptcy blueprint filed Friday morning. On a
But retirees need to know that the early numbers are not final. The plan released today also said that the cuts proposed could be reduced if a deal is approved in a timely way.
-- For police and fire retirees, for example, the cut could drop to 4% in the event of a "timely settlement."
-- For the general city retirees, the cut could drop to 26% if there's a timely settlement.
-- The plan also eliminates cost of living adjustments for pensions in the future.
All is contingent on a "grand bargain" tied to the
The proposed cuts differ betwene the becuase 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 stated that the general retirement system was 77% funded and the police and fire system was 96.2% funded, as of
For retirees, it is too early to tell just when pension checks would be reduced.
The plan of adjustment Emergency Manager
-- The poorest
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 threshold is subject to ongoing negotiations and will be tied to federal poverty levels, according to Orr's plan.
-- 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 10% reduction 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.
-- Live blog:
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.
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
Some retirement experts had expected that eliminating cost-of-living adjustments would be part of the package of pension cuts.
Several communities with public pension plans have eliminated cost-of-living adjustments.
Experts earlier also 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.
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.
The plan issued Friday would include a pension freeze as
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