Mayor Bing has unveiled a detailed plan for the city of Detroit. It includes offering 403(b) plans to city workers, privatizing garbage collection, collecting delinquent taxes, and merging city services. He now has to get buy-in on the pension reform from the city's 48 labor unions. While the unions aren't showing much interest, Mayor Bing is stressing that without these kinds of long-term reforms, Detroit inches closer to a state takeover. His proposal to introduce a 403(b) for new hires puts him at the forefront on municipal pension reform: a few other cities have introduced or are planning to introduce similar defined
contribution style plans for municipal workers including Fort Lauderdale, Florida, Cobb and Gwinnett Counties in Georgia, and San Diego. The detailed proposal was released after city council memebrs critiqued last week's plan calling it a "spreadsheet" rather than a narrative.The newly-released 440 page document has plenty of details and I have only read a portion of the report.
On the pensions front, the Mayor notes that costs for pensions have increased 40 percent in the last four years. His proposed reforms deal with rising costs by reducing the formula benefit multiplier, increasing employee contributions, the vesting period, and establishing a new plan for new hires (Attachment L gives the details). Will this stave off a takeover - it will all depend on how the proposal is received by the Council and unions.
On the pensions front, the Mayor notes that costs for pensions have increased 40 percent in the last four years. His proposed reforms deal with rising costs by reducing the formula benefit multiplier, increasing employee contributions, the vesting period, and establishing a new plan for new hires (Attachment L gives the details). Will this stave off a takeover - it will all depend on how the proposal is received by the Council and unions.
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