Vera Proctor, center, a retiree from the Detroit Police Department, listens to a news conference of union leaders in Detroit. Detroit’s bankruptcy filing means that thousands of retirees could face changes to their expected payouts, despite being guaranteed in a state constitution. Will the bankruptcy filing open new legal questions about what cash strapped cities and municipalities can do when pension benefits grow far larger than what they can afford?DETROIT – K.D. Bullock had been retired from the Detroit Police Department for nearly 17 years and was working as a casino security supervisor when he encountered a problem last March -long accustomed to working on his feet, he suddenly couldn’t make it up a flight of stairs. After months of doctor’s appointments, he was diagnosed with rheumatoid arthritis, which makes it difficult for him to breathe. He not only left his job but had to begin paying others for the fix-up work he’d been doing on his historic six-bedroom house.
Now, he could be facing another hit, this time to his $2,400-a-month pension.
The pensions earned by more than 21,000 retired municipal employees have been placed on the table as Detroit enters bankruptcy proceedings with debts that could amount to $20 billion. Labor unions insist the $3.5 billion in pension benefits are protected by state law, but the city’s emergency manager has included them among the $11 billion in unsecured debt that can be whittled down through bankruptcy. A federal judge has scheduled the first hearing on the city’s case for Wednesday.
The prospect of sharply reduced pension checks has sent a jolt through retired workers who always counted on their pensions-who sometimes sought promotions just to sweeten the pot-and never imagined they could be in danger even as the city’s worsening finances finally led to its bankruptcy filing last week.
Bullock says he’s worried he’ll have to sell his home in Detroit’s historic Indian Village neighborhood, and others are wondering if they can afford a house at all.