Detroit Claws Way Out of Bankruptcy via Pension Cuts

Just one year ago, we published an article sighting the turmoils Detroit city workers faced in the midst of the city’s economic downfall. The city of Detroit, at that time, had filed for $19 billion in bankruptcy protection, one of the largest the country has ever seen. And unfortunately, many of the local citizens financial futures were tied up in this debt.

According to the AP, the city of Detroit is finally making some leeway. Retirees and and workers agreed, by vote, for their pensions to be cut. After 60 days of voting, a tally of all the votes were filed before a judge.

“I want to thank city retirees and active employees who voted for casting aside the rhetoric and making an informed, positive decision about their future and the future of the city,” said Kevyn Orr, the state-appointed emergency manager who has been handling Detroit’s finances since March 2013.

General retirees would get a 4.5 percent pension cut and lose annual inflation adjustments. They accepted the changes with 73 percent of ballots in favor. Retired police officers and firefighters would lose only a portion of their annual cost-of-living raise. Eighty-two percent in that class voted “yes.”

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