Taking challenges to the bankruptcy out of state court is a loss for 21,000 retired city workers:
There are three lawsuits in state courts challenging the bankruptcy. They mostly focus on a provision in the Michigan Constitution that says public pensions "shall not be diminished or impaired." Pensions have not been frozen or reduced in the bankruptcy so far, but officials say there are shortfalls in the funds and that payouts could be at risk.They worked for years to earn those pensions and now their retirements are thrown into jeopardy, as are those of current Detroit public workers. The latter, at least, have a little more time to plan—but given the state of Detroit, they may have few options. The Michigan state constitution calls for public worker pensions to be protected, but that's clearly not the inclination of Gov. Rick Snyder or anyone doing his bidding. The question now is what a federal bankruptcy judge—not a group renowned for protecting workers—will decide on attempts to steal worker pensions.
Sharon Levine, an attorney for a union that represents city workers, urged Rhodes to let those lawsuits run their course. She said there's no federal insurance for public pensions once they're broken, unlike pensions at private employers.
"Our members who participate at most are at or below $19,000 a year. There is no safety net," Levine said.