DETROIT – Detroit retirees could see smaller pension checks after a judge said pensions are a fair target in the city’s historic bankruptcy.
Judge Steven Rhodes says pensions are like contracts and aren’t immune to being changed in a public bankruptcy. It was probably the most controversial decision Tuesday in a broader ruling that allows Detroit to come up with a plan to cure $18 billion in debt.
Reaction is harsh. Retiree David Sole predicts people could lose homes and be forced into soup lines. While Detroit says pension funds are underfunded by $3.5 billion, there’s been no specific proposal to reduce pensions. That’s caused much anxiety in the 461/27-month-old case.
Detroit emergency manager Kevyn Orr is promising to be “thoughtful, measured and humane” with retirees.
An interactive chronicling the Motor City’s bid for Chapter 9 protection is available at /interactives/2013/detroit-bankruptcy/