Detroit retirees blast city plan

By Allison Bell

April 09, 2014 at 01:38 PM

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The team trying to get the city of Detroit out of bankruptcy is taking a "stunning" approach to restructuring retiree health benefits, according to the committee that represents the city's retirees.

The committee talks about funding for pension plans and "other post-employment benefits" (OPEB) — retiree health benefits — in an objection to a draft city debt adjustment disclosure statement.

The city filed for federal bankruptcy court protection in July.

Since then, the city has reduced support for retiree health coverage about 85 percent and eliminated support for retiree dental and vision coverage, the retirees' committee writes in the objection.

Under the new amended debt-adjustment plan, "the city has completely eliminated all responsibility for retiree health care and other benefits for the retirees," the committee writes.

The city would use part of a note to fund a "voluntary employee benefit association" (VEBA) for the retirees, but there is no information in the amended plan about the amount of future benefits available for retirees, the committee writes.

The city gave retirees too little information about how the VEBA proposal might affect retirees' benefits for the retirees to decide how to vote on the plan, the committee says.

Because the current version of the disclosure statement is so vague, it fails to meet the bankruptcy court's "adequate information" standard, the committee says.

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