OK

To begin, let me start off by saying that this is the first diary I've written for the DK community, so please bear with me and absolutely provide any constructive criticism you see fit so - I'm always happy to improve my writing style.

Keyvn Orr, Detroits appointed emergency manager, froze the cities pension plans quietly effective 12/31, and replaced it with a 401k style plan.

Days later, Orr issued a stay of the freeze, while he awaits mediation to come to an agreement on the final disposition of workers current and future retirement benefits.

My thoughts after the fold.

The quiet and arbitrary freeze placed by Orr makes me wonder even moreso if robbing employees of their pension benefits wasn't the plan all along.  I keep saying "quiet" because until today, I've read nothing about the freeze anywhere.  Granted, I'm in New York and not Detroit, but I've been following the situation as closely as I can.

The first question that comes to mind for me is - how does an unelected emergency manager have the power to arbitrarily freeze pension plans in the first place?  While I realize under bankruptcy protection, he certainly has the power to determine what debts are paid and what debts are not paid - with the agreement of the bankruptcy judge - but shouldn't flat out ending a pension plan be the decision of the voting populace, or at least, require the bankruptcy judges say-so?

Given the controversy over the amount of debt owed to the pension fund - Orr says one figure, the funds actuaries quote one far lower - the arbitrary nature of the freeze just seems wrong since the question of what the true debt is has not even been settled yet in open court.  Again, not being a Detroit resident, my opinion on the matter might not match the opinion of those that live, work, pay taxes, and vote there, and as such, maybe doesn't amount to a hill of beans.  But this still seems morally contemptible to me regardless, even if Orr has since stayed his original order.

It certainly seems to me that there are many other solutions at Orrs disposal, such as agreeing with pensioners and members to a reduction in benefits, and/or amortizing employer contributions over an extended time frame - which is a solution we've taken here in New York.  It's not a perfect solution, but it does allow cash-strapped municipalities here to have a little breathing room without completely sticking it to employees that have spent their lives working to earn their pensions.

The way this whole thing is working out just makes it seem like wage theft/pension theft was the plan from the get-go even more so than it did previously.  But again, I'm an outsider looking in.

Originally posted to Darth Stateworker on Fri Jan 10, 2014 at 04:28 PM PST.

Also republished by Motor City Kossacks.

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