February 22, 2014 at 11:12 pm

Detroit bankruptcy proposal leaves pensioners angry, confused

Detroit pensioner Oletha Stanfield spent 27 years with the city. (Steve Perez / The Detroit News)

Detroit — When Albert Jackson was hired as a garbage collector for the City of Detroit in 1980, Mayor Coleman Young was working on a plan to save money. Jackson was immediately informed that the three-man crew on each of the garbage trucks was being reduced to one person.

“They called us ‘jumping jacks’ because we’d be jumping from one side of the street to the other to pick up the refuse,” said Jackson, now 77 and 18 years out of retirement.

For years, Jackson withstood the physical labor of the job while paying into a pension fund. When his age forced him to retire in 1996, he was glad for that pension, $488 a month.

“If it weren’t for social security, I wouldn’t survive,” said Jackson.

As the city moves further into the bankruptcy process, Jackson has been left fearful over what will happen to the money he does receive should a judge determine that cuts to retiree pensions are necessary.

“It would be hard to pay for rent, buy food, put gas in the car,” the Detroiter and Air Force veteran said. “It’s almost impossible now.”

Jackson is one of about 24,000 general retirement system retirees who could lose up to 34 percent of their pensions should a deal proposed Friday in bankruptcy court be accepted.

The cuts to retirees are less severe than what was previous proposed by Emergency Manager Kevyn Orr, according to documents filed Friday in the city’s Chapter 9 case.

Under terms proposed by Orr, 8,000 retired police and fire pensioners could recover as much as 96 percent of the current monthly payouts if they settle with the city this spring. Payouts to the nearly 24,000 General Retirement System retirees would be 74 percent of current levels, considerably more than Orr suggested in last June’s proposal to creditors.

On Friday, the Official Committee of Retirees called the plan “nonconfirmable.” It said the plan would cause 20 percent of city retirees to live below the federal poverty line over the next 10 years; that pensions would be cut 40-50 percent; and that the interest rate used to calculate the health of existing pension funds is “unjustifiably low.”

The determination will come to U.S. Bankruptcy Judge Steven Rhodes. Rhodes has already ruled the proposed pension reductions are legal in bankruptcy, despite state constitutional protection.

For retired health department retiree Oletha Stanfield, who spent 27 years with the city, it isn’t the percentage of the pension she could lose, it’s the fact that they are taking from retiree pensions at all.

I never did think I’d be faced with something like this,” said Stanfield, who retired 15 years ago. “I never did think they’d have such little respect for senior citizens.”

The Southfield resident’s pension is less than $1,600 a month, funds she relies on for paying for her mortgage and condo fee. She fears losing her home and has tried to apply for part time jobs, but has been unable to find anyone who will take on an elderly employee.

“I’m just so hurt and disappointed,” said Stanfield. “I don’t know what’s going to happen.”

Isabell Sykes may have a part time job, but she is unable to work more hours than that. Frankly, after spending 30 years working in the city’s Community and Economic Development department, she says she didn’t expect she’d need to have a backup plan.

“We worked with the understanding that when we put money in, we’d be taken care of for the rest of our lives,” said the 82-year-old from Southfield. “Now they’re breaking that contract.”

Sykes’ pension of around $1,200 a month pays for her housing and her car and not much beyond that, she says. She works three days a week as a counselor at a small adult daycare center, but says she is not physically able to work more hours.

“We are getting screwed in that the greatest burden in supporting this bankruptcy is being put on the retirees,” said Sykes. “The city retirees are the ones being charged the greatest amount.”

lrazzaq@detroitnews.com
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Albert Jackson of Detroit speak with the Detroit News, Saturday, about his ... (Steve Perez / The Detroit News)