We at AARP Michigan wholeheartedly empathize with the more than 21,000 City of Detroit retirees whose pensions may be impacted by ongoing city bankruptcy proceedings. About 85 percent of these retirees still live in Michigan, and more than one-third live in Detroit. We’re not talking about wealthy folks here.
The average general retirement pension is a little more than $18,000 a year. Retired police and firefighters collect around $30,000 a year, and they are not eligible for Social Security benefits. City of Detroit retirees worked hard and are counting on their pensions to maintain a basic standard of living in retirement.
Many put their lives on the line every day to protect Detroit’s citizens. They made their payments in full during their working days and it’s unfair to change the rules at the end of the game for these dedicated public employees. And remember, the Michigan Constitution specifically states public pensions cannot be diminished or impaired, and establishes that retirees have a contractual right to their pension.
Attorney General Bill Schuette, in his filing with the U.S. Bankruptcy Court, says the Michigan Constitution “unambiguously prevents public officials from diminishing vested public-employee pension rights… This provision prohibits the tate, its officers, and any of its political units, including the city and its officers, from diminishing or impairing the pension benefits currently being received by retired city pensioners.”We couldn’t agree more. Raiding the pensions of hard-working Michiganders to make bondholders whole is not the way to right Detroit’s fiscal house.
Detroit’s public employees — all of us — deserve an open, thoughtful discussion about finding responsible solutions that protect and preserve health and financial security in retirement in Michigan. As we work to bring national and state thought leaders together in Detroit to consider long-term solutions to preserving and protecting retirement income, we’d like to hear from you. Let us know about your concerns and how AARP can help.
Call Mark Hornbeck at the state office toll-free at 1-866-227-7448 or send an e-mail to mhornbeck@ aarp.org. Thomas Kimble is the AARP Michigan volunteer state president