Traverse City Record-Eagle

Archive: Thursday

January 17, 2013

Detroit: Yes to pension freeze, no to pay cut

DETROIT — The Detroit City Council has given partial approval to municipal employee compensation cuts that Mayor Dave Bing is seeking to help close $327 million a budget deficit and stave off a state financial takeover.

The council on Wednesday passed a one-year freeze in pension benefits that Bing says will save $25 million. It means that employees won't earn pension credits for 12 months beginning Feb. 1.

But the council rejected Bing's request for a 20 percent wage reduction for nonunion employees projected to save about $3 million over a year.

Instead, the council scheduled a Jan. 25 hearing on a 10 percent wage cut that would be accomplished through furlough days.

A state review team is considering whether to recommend appointment of an emergency financial manager.

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