Detroit’s active and retired public workers approved the city’s plan to exit bankruptcy, which includes freezing the two public defined benefit plans and replacing them with hybrid plans.
About 82% of the active and retired participants of the $3.4 billion Police & Fire Retirement System and 73% of members of the $2.8 billion General Retirement System voted in favor of the plan, said Kevyn D. Orr, the state-appointed emergency manager for Detroit overseeing the bankruptcy process, in a statement on Monday.
A majority of participants of each pension plan had to approve the bankruptcy recovery plan in order for it to move forward for consideration by Judge Steven W. Rhodes at a trial that begins in U.S. Bankruptcy Court in Detroit on Aug. 14.
Their approval also was “a necessary condition” for the city of Detroit to get a total of $816 million from the state of Michigan, private foundations and the Detroit Institute of Arts to reduce the retirement underfunding, Mr. Orr said in his statement.
“The voting shows strong support for the city’s plan to adjust its debts and for the investment necessary to provide essential services and put Detroit on secure financial footing,” Mr. Orr said in his statement.
Michigan Gov. Rick Snyder said in a statement: “These were difficult decisions for many people … this vote is recognition that all of Michigan has pulled together to support our state’s largest and iconic city and the people who work to protect and provide services to its residents.”