Orr freezes pensions for Detroit workers, ends cost-of-living adjustments
Source: Detroit Free Press
Detroit emergency manager Kevyn Orr quietly issued a freeze on the pensions of city workers as of Dec. 31, meaning no new benefits will be accrued for members of the General Retirement System and pensions will be closed to all new city employees, according to an executive order released by Orrs office.
The move prompted outrage from the retirement system, whose spokeswoman, Tina Bassett, called the order an outrageous and over-zealous action from the EMs office.
.......
The order also closes the retirement systems Annuity Savings Fund to new employees, and it will stop accepting contributions sometime this month. The order also ends future cost-of-living adjustments.
Instead of pensions, Orrs order said the city will create a 401k-style savings plan.
Read more: http://www.freep.com/article/20140106/NEWS/301060055/Detroit-pension-freeze-Orr
Gidney N Cloyd
(19,847 posts)blkmusclmachine
(16,149 posts)WestSeattle2
(1,730 posts)what would happen to the economy? Our economy is based (70%) on consumption; if Americans save instead of consume, we'd be in a world of hurt. What would the unemployment levels be then? I'd bet tens of millions would be thrown out of work making the darkest days of the "Great Recession" seem like a walk in the park.
Crazy catch-22 we've put ourselves in. Not to mention the absurdity of believing that 330 million Americans will be able to save enough over a 40 year working career to support a 25-30 year retirement.
JustABozoOnThisBus
(23,369 posts)... the hope is that what it's invested in will spend wisely and make profits, thereby increasing its value.
Your savings are not taken from the economy. They may be taken from the local economy, the local shop owners.
If you can afford to save, it's absurd not to.
I am not a professional financial planner or economist. My opinion is worth what you paid for it.
WestSeattle2
(1,730 posts)401k mutual funds is not being spent locally. So we buy stock, the companies we invest in then take that money and build new factory capacity in China or Mexico. Makes perfect sense!
sakabatou
(42,176 posts)How many times have EM not screwed people over?
King_Klonopin
(1,307 posts)Exploit a financial crisis (shock and awe) caused by greedheads
but blamed on unions and labor costs.
Set up some republican puppet as the "Emergency Manager"
(i.e. the unelected, prejudicial, savior and overlord) to enact anti-
union, anti-labor fiats under the pretense of austerity.
Pensions = a pile of money that working-class stiffs don't really
deserve. Give it to a financial institution to "invest" (gamble with,
siphon off fees, etc.)
Cost-of-living adjustments are an antiquated notion from the
60's and 70's -- another "entitlement" for moochers. If people need
more money in order to live, then they should just work more.
This guy should be flayed and hung from a gibbet...