What a mess!<\/a><\/p>\nIn the private sector, employers cannot cut back accrued pension benefits (though they can freeze and eliminate future accruals), but, the same time, should an employer go bankrupt, the PBGC \u2014 Pension Benefit Guarantee Corporation \u2014 pays out the benefits based on \u201cinsurance premiums\u201d paid into the PBGC over the life of the plan.<\/p>\n
In the public sector, there is no similar entity \u2014 there is no \u201cinsurance\u201d-type arrangement.\u00a0 But to say that the city of Detroit is obliged to pay these benefits, regardless of the fact that the city government should have never promised to pay them in the first place \u2014 it defies common sense.\u00a0 There is no money.\u00a0 Maybe the bankruptcy proceeding has to go even further, and dissolve the corporate entity called \u201cCity of Detroit\u201d?\u00a0 Then the land area \u201cformerly known as Detroit\u201d becomes unincorporated, as, say, Detroit Township, wiped clean of all of the \u201cCity of Detroit\u201ds obligations?<\/p>\n
A bit Swiftian of a solution, to sure \u2014 but maybe not?<\/p>\n
(Of course, Illinois, my current home, has the same pension mess on a statewide scale, but without the absolute lack of money to go along with it.\u00a0 If I were czar, or even moderately influential, I\u2019d advocate for a constitutional amendment that neither the state nor any governmental body in the state, can promise employee benefits payable in future years.\u00a0 Not retiree health care, not pension benefits \u2014 the unions can run collect contributions and run Taft-Hartley Multi-Employer if they like instead.)<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"
What a mess! In the private sector, employers cannot cut back accrued pension benefits (though they can freeze and eliminate future accruals), but, the same time, should an employer go bankrupt, the PBGC \u2014 Pension Benefit Guarantee Corporation \u2014 pays out the benefits based on \u201cinsurance premiums\u201d paid into the PBGC over the life of […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-937","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\n
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