The city of Detroit filed a petition in bankruptcy court Wednesday seeking a 30-year amortization in the police pension plan and the firefighters pension system.
The PFRS approved a 20-year amortization payment schedule last year, which Mayor Mike Duggan had previously expressed frustration about.
The city has scheduled a 30-year window when payments will resume in July 2023, after a nine-year pause in paying that debt as part of negotiations during the landmark 2013-14 bankruptcy.
“Trustees have heard of our actuaries and other financial advisors who have run numerous what-if scenarios based on multiple funding models, including 30-year, 20-year and others,” PFRS President Dean Pincheck said Thursday. , in a press release. “The 30-year-old model may be better for city budgets but is not in the best interests of retirees.”
Detroit officials have previously said the shorter timeline is less tenable because it will increase the city’s upfront costs. Duggan said in March he planned to take the matter to bankruptcy court and said if that failed, he would potentially go to the state legislature.
“We understand the administration’s fiscal stance as the reason for the US bankruptcy court filing seeking a 30-year versus 20-year pension fund amortization,” Pincheck said in the statement. “We believe that the Board’s vote in favor of the PFRS Investment Committee’s recommendation to favor a 20-year repayment over 30 years was and remains the correct position on this issue.”
According to a statement from PFRS, Detroit plans to add $90 million to the retirement trust fund this year, which Pincheck called “very good news” and said the city has invested $355 million in the funds to date for RSIP and General Retirement. Beneficiaries of the system.
“While we do not agree with all aspects of future funding proposed by the city, there is a good spirit of cooperation with Mayor Duggan’s administration and we are encouraged by the city’s funding of the fund. earmarking of retirees to help bolster payments to the pension system in 2024 and beyond,” Pincheck said in the statement.
The city declined to comment on the lawsuit.
