Municipal Government

Keep Fighting to Save Pensions in Detroit

June 17, 2014
By Michael Mulholland, Acting President, AFSCME Local 207

Detroit, Michigan – As a retiree from the City of Detroit, and acting president of AFSCME Local 207, I oppose the so-called grand bargain. Every dollar stolen from us will not be given to the people of Detroit, but merely help the greedy banks cut their losses. They expect us to bail them out with our modest pensions. This deal should be called the grand larceny.

There are no guarantees that our pensions won’t be cut again. And this is more than a 4.5% cut for general retirees. When you consider health care costs, it is more like 35-50%. Almost half of the general fund retirees who planned for our retirement through the annuity savings plan will see a total pension cut of up 20%. That’s my situation. We are not even allowed to pay back what Kevyn Orr calls “excess interest” in a lump sum. The 20% cut could continue for my entire life. Because I opted for a reduced pension so that my wife could have financial security after I die, the 20% cut could continue for her entire life. The state of Michigan’s $194-million contribution is a small portion of the revenue sharing that the state owe Detroit. Annuity savings participants are being extorted for at least $230 million.

Elimination of cost of living allowances will cost us and our beneficiaries 2.25% a year. Medical insurance cuts can add up to an additional 30% loss, especially for those who are not old enough for Medicare. I am on Medicare, yet my monthly drug costs increased 400% after March 1 when the city reduced a Medicare supplement.

The experts say that this is “the best we can get,” that the cuts are merciful, and that resistance is futile. The same arguments will be used to impose the “Detroit blueprint” on pensions throughout the nation. We are told that if we vote against this, then even more punitive cuts will be imposed on us. But it has been our experience that whenever injustice is tolerated for the illusion of security, more demands soon follow.

If we vote yes, we lose the right to sue. We should keep fighting and continue our legal appeals. However, as the U.S. Supreme Court’s recent ruling against affirmative action shows, we cannot simply rely on the courts for justice. AFSCME Local 207’s Executive Board urges everyone to vote against the Detroit’s bankruptcy plan to help build a mass movement of resistance. That is the only way we can secure our pensions and a brighter future for the people of Detroit and workers everywhere.

June 16, 2014

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