Put On Your Shocked Faces: Report Says Mismanaged Detroit Public Workers' Pension Plan Contributed To Downfall
Stunned, in a way that's totally not stunning.
Detroit’s emergency manager wants to freeze the city’s pension system for public workers in light of mounting evidence that it was operated in an unsound manner for many years, contributing to the city’s downfall.
The emergency manager, Kevyn Orr, issued on Thursday the preliminary results of a three-month investigation that identified questionable actions, including diversions of pooled money into individual accounts, excessive real estate investments that lost millions of dollars and “disconcerting administrative protocols” for the handling of health care and unemployment benefits. The investigation, conducted jointly by Detroit’s independent auditor general and inspector general, was the first stage of a review that is continuing and expanding, investigators said.
Unfunded pensions and health care obligations are by far the biggest claims in Detroit’s record-setting municipal bankruptcy. The city has about 33,000 workers and retirees who have been promised what human resources records call an “exceptional benefit package” to promote loyalty and reduce turnover.
For those of you curious to see how this plays out at the state level, take a look here.
But, they care or something.