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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsYour pensions are not safe - Detroit Ruling on Bankruptcy Lifts Pension Protections
DETROIT In a ruling that could reverberate far beyond Detroit, a federal judge held on Tuesday that this battered city could formally enter bankruptcy and asserted that Detroits obligation to pay pensions in full was not untouchable.
The judge, Steven W. Rhodes, dealt a major blow to the widely held belief that state laws preserve public pensions, and his ruling is likely to resonate in Chicago, Los Angeles, Philadelphia and many other American cities where the rising cost of pensions has been crowding out spending for public schools, police departments and other services.
The judge made it clear that public employee pensions were not protected in a federal Chapter 9 bankruptcy, even though the Michigan Constitution expressly protects them. Pension benefits are a contractual right and are not entitled to any heightened protection in a municipal bankruptcy, he said.
James E. Spiotto, a lawyer with the firm Chapman & Cutler in Chicago who specializes in municipal bankruptcy and was not involved in the case, said: No bankruptcy court had ruled that before. It will be instructive.
http://www.nytimes.com/2013/12/04/us/detroit-bankruptcy-ruling.html?nl=todaysheadlines&emc=edit_th_20131204&_r=0
Setting it up to pull the rug out from under peoples retirement!
abelenkpe
(9,933 posts)raccoon
(31,111 posts)Holly_Hobby
(3,033 posts)retirement funds are IT. Can anyone think of a reason why the feds can't fund this?
closeupready
(29,503 posts)There should be a federal law changing the rules to disallow discharging pensions, and I guarantee you, Hillary will not support such a change - not a chance. K&R
WinkyDink
(51,311 posts)pension, as is my husband's, is a state one funded by teachers' contributions as well as public funding. And it's a HUGE CONTROVERSY IN PA, now that we have a corrupt Republican greed-head Governor who would sell off the entire state if he could.
http://www.pbgc.gov/
If this law is upheld, and teachers, police, civil employees, all lose their pensions, there WILL be a revolution. Public education will end. Period. NOBODY would enter the profession with zero pension to look forward to!!
But then, evil men DO want to end public education. Even government.