Bankruptcy pension aid deadline looms
Detroit — Low-income city retirees have until the close of business Wednesday to apply for financial assistance that could soften the blow to their monthly pension checks as a result of Detroit’s bankruptcy.
The state began accepting one-time applications in December for the initiative aimed at supplementing pension payments to qualified retirees affected by the city’s debt-cutting plan.
To be considered, a pensioner must be 60 or older and have an income that is at 140 percent of the 2013 federal poverty level.
The requirements vary based on the number of dependents, but range from no more than an annual income of $16,338 for a single person to $22,022 for a household of two, and $33,390 for a household of four.
The Income Stabilization Fund Program was created as part of the bankruptcy resolution and seeks to prevent eligible retirees from falling below the poverty line as a result of the impending pension cuts. The program allocates $20 million over 14 years for eligible retirees from either of the city’s two pension funds.
The forms must completed, signed and postmarked — or emailed — by the close of business Wednesday, officials say.
An estimated 20,000 retirees in the General Retirement and Detroit Police and Fire Retirement systems will be affected by pension deductions resulting from the city’s bankruptcy.
“If a retiree from Police and Fire or the GRS thinks they may qualify, they should apply,” said Bruce Babiarz, a spokesman for the Police and Fire Retirement System. “It’s a one-time-only offer.”
The city’s plan officially went into effect on Dec. 10. Under it, general city workers endure a 4.5 percent base cut in pensions and the elimination of an annual cost-of-living increase.
In addition, the city will seek to recoup $239 million from the optional annuity savings fund accounts of some general city retirees who were credited with interest earnings that exceeded the retirement system’s actual investment returns.
The pensions of police and firefighters are not being cut, but their annual 2.25 percent cost-of-living adjustment is reduced to about 1 percent.
The stabilization program is expected to start March 1, when changes are implemented in benefit payments, pension officials have said.
State treasury officials are overseeing the application process and say it’s difficult to estimate how many retirees will qualify, since it will be determined on a case-by-case basis depending on adjusted gross income and dependents.
But an initial expectation was that it could involve 6,000 to 8,000, said treasury spokesman Terry Stanton.
The department does not have a specific number of how many have applied as of Monday, he added.
In mid-December, crowds packed two informational meetings hosted by the city’s General Retirement System pension fund to inform retirees about the stabilization fund and changes to retirement benefits.
“They just want to know what the future holds,” said Tina Bassett, a GRS spokeswoman. “Our retirees have taken a devastating cut.”
Bassett stressed there is still time to apply. Individuals can find and complete the form on the retirement system website and email it in.
In addition, the Michigan Association of CPAs and Accounting Aid Society partnered with Treasury and Gov. Rick Snyder’s office, providing volunteers to staff an assistance hotline. It remains open through Tuesday.
For help, contact the hotline through Tuesday at (313) 879-4771 or visit www.rscd.org.