Detroit reaches deals with 2 pension funds, retiree group

Detroit still needs $350M from state lawmakers

DETROIT - On top of deals with retirees and both pension systems, the city has released a new plan of adjustment -- a road map out of bankruptcy, and there was even more in play Wednesday night.

Pressure is building for Michigan lawmakers to commit $350 million to Detroit pensions after the bankrupt city reached tentative agreements with pension funds and a retiree group.

The deals are tied to Detroit getting money from the state over 20 years, along with $466 million in private money, all to shore up pensions.

Retired police and firefighters would see smaller cost-of-living payments. Other city retirees would see a 4.5 percent pension cut. The $816 million vanishes if retirees don't vote in favor in the weeks ahead.

Complete coverage: Detroit bankruptcy

The city's General Pension Board approved the 4.5 percent pension cut deal on Wednesday after several days of negotiating. It's not quite as good as the police and fire deal -- they received full pension benefits with health care benefits cut and a 1 percent cost-of-living adjustment that can grow in the future.

More: Deal means no cuts to Detroit police, firefighter pensions

General Pension Board lawyer Michael Van Overbeke is pleased.

"I think it's the best deal that we have been able to put together through the mediation process that represents the best scenario for the retirees," he said.

Retired judge Ray Reynolds said this bankruptcy just went from wobbly to very workable.

Thursday morning it's back to bankruptcy court and there are hundreds of pages of a new plan of adjustment for the judge to take a look at.

Bottom line: Deals with stakeholders are coming fast and dreaded major pension cuts have been avoided.

Judge (Steven) Rhodes had given a signal along the way he wanted the retirees treated humanely. I think that was the phrase he used, and this is humane," said Reynolds.

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