Reduced Pension Payouts, Worker Concessions Tough Sell for Detroit EMJune 18, 2013 – In The News
Michael Sweet was quoted in the Detroit News article "Reduced Pension Payouts, Worker Concessions Tough Sell for Detroit EM." While the full text can be found in the June 18, 2013, issue of Detroit News, a synopsis is noted below.
Detroit Emergency Manager Kevyn Orr is scheduled to meet with union leaders and pension fund representatives Thursday in what could be the turning point in efforts to keep the city from bankruptcy.
Orr wants employees and retirees to agree to reduced retirement payouts that would lower the city’s unfunded pension liability, which he views as unsecured debt. Orr has hinted he is prepared to take the city into federal bankruptcy court, where Michigan’s constitutional protections for pensions may not apply, if the unions and retirees refuse.
“If pensions are nothing but an unsecured creditor… that’s very different than if they have a state constitutional status that ensures they’ll get paid 100 percent before others get paid their share,” said Michael Sweet.
Sweet said there could be “great ramifications” if unfunded pensions are treated the same as other unsecured debt. “It changes everything,” Sweet said.