Skip to comments.Undisclosed Pension Extras Cost Detroit Billions
Posted on 09/25/2013 1:49:35 PM PDT by reaganaut1
Detroits municipal pension fund made undisclosed payments for decades to retirees, active workers and others above and beyond normal benefits, costing the struggling city billions of dollars, according to an outside actuary hired to examine the payments.
The payments included bonuses to retirees, supplements to workers not yet retired and cash to the families of workers who died too young to get a pension, according to a report by the outside actuary and other sources.
How much each person received is not known because payments were not disclosed in the annual reports of the fund.
Detroit has nearly 12,000 retired general workers, who last year received pensions of $19,213 a year on average hardly enough to drive a great American city into bankruptcy. But the total excess payments in some years ran to more than $100 million, a crushing expense for a city in steep decline. In some years, the outside actuary found, Detroit poured more than twice the amount into the pension fund that it would have had to contribute had it only paid the specified pension benefits.
And even then, the citys contributions were not enough. So much money had been drained from the pension fund that by 2005, Detroit could no longer replenish it from its dwindling tax revenues. Instead, the city turned to the public bond markets, borrowed $1.44 billion and used that to fill the hole.
Even that didnt work. Last June, Detroit failed to make a $39.7 million interest payment on that borrowing the first default of what was soon to become the biggest municipal bankruptcy case in American history.
Detroit said that making the interest payment would have consumed more than 90 percent of its available cash. And besides, the hole in its pension fund was growing again
(Excerpt) Read more at dealbook.nytimes.com ...
Lottery style Government retirement pensions at all levels in every state, county and city in the U.S. are economically gang raping the private sector.
...and who “runs” detroit? DIMs & LIBs. Many of them are (coincidentally) of the black persuasion. We shouldn’t draw any conclusions, but we should send them more of our money. No???
Nothing to see here, move along.
How do you get a bonus when your retired? Ah, that be SOCIAL JUSTICE or something.
BTW, there are now more unionized government employees in the U.S. today, than exist in all of the private sector.
The purpose of the Democrat party is to elect thieves to public office so that they have access to public treasuries in order to loot the treasuries.
When they had good years in the "market" rather than hang onto the unrealized gain in the Pension for a rainy day, they doled out 7.5% of you annual pension as a bonus or almost like a dividend. Well in lean times the pie got smaller and big chunks were already eaten so to speak.... Not good...
Since it worked out so well for Detroit, let’s UNIONIZE our entire health care system under 0bamacare, shall we? /s
I don't blame it on the union, I blame it on the city government from the top on down.
No accountability, no oversight, no adherence to govt. regs, and no knowledge of the pension plan by the grunts who were ultimately responsible for calculating these payments and their superiors who never cared what was going on.
Raise taxes and print more money.
Problem fixed. :)
Exactly. This is chump change in 0bombacare buck$.
There’s no telling how much graft was paid out over the years.
“I don’t blame it on the union, I blame it on the city government from the top on down.”
You have to blame the unions when they control who gets elected in local government.
That is the same reason public schools are so expensive and dysfunctional.
The union controls the school board elections and the same board approves the contracts.
Public sector unions should be outlawed nationwide!
Except for the fact that the union campaigned, financed and helped elect the city government.
A democrat is a democrat no matter who finances them.......
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