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Detroit Backs Pension Cuts; Some Say New Retirement System Is Needed

When the City of Detroit’s employees and retirees approved a plan in late July to cut benefits to their pension as part of the bankruptcy proceedings, Emergency Manager Kevyn Orr lauded the deal as something that allowed the city to offer a “sustainable retirement plan” that is “fiscally sound.” But some taxpayer advocates and a pension expert say the city missed a chance to provide a better solution to the longstanding problem with city pensions. Detroit’s pension liabilities were a big reason...

Retiree Healthcare Tops Unfunded Pensions as Fiscal Threat

Can anything be in worse condition than unfunded government pensions? Unfortunately, yes – and it’s something few people have heard of. It’s called OPEB (Other Post-Employment Benefits), or government retiree healthcare commitments. The average state has $11.46 billion of unfunded retiree healthcare debt compared to $10.85 billion of pension debt as of fiscal year-end 2012.  OPEB and pension benefits are part of employee compensation. Just like salaries, these retirement benefits are costs...

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