Detroit’s Retirees Vote to Accept Lower Pensions

The move by 32,000 retirees is seen as being an important development for the city to emerge from bankruptcy.

Posted: 07/22/2014 04:39 PM EDT

The public sector retirees in Detroit have voted to accept a reduction in their pension benefits, something many Detroit leaders had feared. However, the acceptance of the reduced pension benefits sets the stage for Detroit to emerge from bankruptcy, which could happen by the end of the year.

“The voting shows strong support for the city’s plan to adjust its debts and for the investment necessary to provide essential services and put Detroit on secure financial footing,” said Kevyn D. Orr, Detroit’s emergency financial manager who was appointed by the governor last year.

“I want to thank city retirees and active employees who voted for casting aside the rhetoric and making an informed positive decision about their future and the future of the city of Detroit,” Orr said.

Despite that depiction, settling on the lower pension payments and reduced cost-of-living increases was by no means without controversy among the 32,000 retirees. The agreement calls for as much as 4.5 percent reductions in some of the pensioners payments.

“It was difficult for many of these retirees,” said the Rev. James Perkins, the pastor of the Greater Christ Baptist Church on Detroit’s East Side and the vice president of the Progressive National Baptist Convention, speaking with BET.com.

“It was unfair in that these are people who have worked their whole lives and who have paid their dues and have lived up to their end of the deal,” Perkins said. “This is all the money they have to live off. Yet, it’s like they were backed into a corner because Kevyn Orr said this is the best deal he could get for them and if they didn’t take it, it could well be substantially less.”

Follow Jonathan Hicks on Twitter: @HicksJonathan

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(Photo: AP Photo/Paul Sancya, File)

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