Detroit Pension Proposal Would Shut Out New HiresSeptember 27, 2013 – In The News
Michael Sweet was quoted in the Associated Press article "Detroit Pension Proposal Would Shut Out New Hires." While the full text can be found in the September 27, 2013, issue of Associated Press, a synopsis is noted below.
Detroit’s emergency manager Kevyn Orr has proposed closing the city’s pension plans to new employees by the end of the year and moving the city to a 401 (k)-style system that has become common in the private sector, while also freezing benefits to about 18,000 members.
Any changes could take as long as two decades to make a dent in how Detroit’s long-term debt is structured, according to Michael Sweet.
Transitioning from a defined benefit to a defined contribution plan “isn’t going to change the savings tomorrow,” Sweet said. “Kevyn Orr is working on all sorts of different things. One is to address the short term issues and deal with the longer term imbalance of the budget.”