Pensions in play in Detroit bankruptcy: What's equitable?

Marick F. Masters, professor of management for Wayne State University’s School of Business Administration and director of Labor@Wayne, spoke with Crain’s Detroit Business about Detroit bankruptcy and pension claims.

"You by no means have to treat every class of pensioner equally. But you do have to treat them non-discriminatorily," Masters said. "In this case, the police and fire might try to get some preferential treatment either because of the Social Security issue or because their pension plan is better funded (than the general system). If so, you can expect some of the other classes of employees might oppose or respond to that." 

Masters also expects the reorganization will likely include a conversion to defined contribution pensions or a hybrid version of both plans for current employees. He said it's possible that pensioners' claims will differ by age or market conditions when participants retired, but they are much more likely to break apart by employee classification or plan funding levels.

Crain's Detroit Business

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