Detroit Retirees Fight For Pension Booster

January 12, 2022

By David Sole

The COVID-19 pandemic year 2021 has seen the highest rate of inflation in about 40 years in the United States. The rapid increase in prices for all sorts of consumer goods is especially hard on retirees with fixed incomes. In Detroit, Michigan some retirees are fighting back.

There are about 11,200 City of Detroit General Fund retirees whose pensions lost a modest 2.25% annual cost of living factor in the 2014 settlement of the Detroit bankruptcy. Since the bankruptcy Inflation had been creeping up. For those 6 years the loss to inflation was 8.83%. But 2021 has seen inflation jump at least another 7%, a huge decrease in purchasing power.

The Social Security Administration responded to the 2021 inflation jump by raising all Social Security checks by 5.9% starting in January 2022. (However, Medicare is taking much of this back with a basic monthly premium increase of 15.5 percent, or $21.60, from $148.50 to $170.10 a month). The Texas state legislature also took note of the damage the 2021 inflation has done to retired Texas teachers and other school workers. This month over 400,000 retirees will be sent a “13th check” up to a maximum of $2400. This amounts to a 8.3% one-time payment.

Detroit General Fund retirees have launched a struggle, demanding that the city officials provide a pension “booster shot” of $1400 to each retiree. This is 7% of the average pension of $20,000 per year. Retirees from the Moratorium Now Coalition and the Detroit Active and Retired Employees Association issued the following statement:

2021 COVID Induced Inflation Cut Pensions 7%

City of Detroit Retirees Deserve $1400 Pension “Booster Shot”

City of Detroit General Fund Retirees have been severely impacted by the COVID-19 pandemic. Retirees are among the most vulnerable population due to declining health and income. The death rate of Detroit General Fund Retirees during the pandemic has exceeded expectations by 151%.

Inflation for 2021 was at a forty year high of 7%. This surge has decreased retiree buying power substantially. For comparison, from 2015 to 2020 retirees lost only 9% in six years from inflation increases.  General Fund Retirees stopped receiving cost of living adjustment due to the bankruptcy plan of adjustment in 2014. (Police and fire retirees did not lose all of their cost of living protection).

Retirees are having a hard time providing for their basic needs during the pandemic. Detroit’s elected officials could use some of the $826 million Federal funds from the American Rescue Plan Act to rescue Detroit’s General Fund Retirees.

There are about 11,200 General Fund retirees with an average yearly pension of $20,000 (2020 figures). A 7% “booster shot” one-time payment would be $1,400 to rescue these retirees from this severe loss. The cost to the City would be less than $16 million – less than 2% of the total American Rescue Plan package. This is what these funds were intended to do!

We call on Detroit’s Mayor and City Council to take immediate action to protect City of Detroit General Fund retirees who gave so much to the city in their years of service by rescuing General Fund Retirees with a $1,400 pension “booster shot.”

It should be noted that of Detroit’s $826 million in ARPA funds, $400 million was set aside to cover “shortfalls” and $426 million was to go to “community investment.” The Detroit Police Department is to get $50 million of those funds – three times what it would cost to help out the retirees.

It has been reported that a special grant from the Federal government of $15.5 million has been given to the business concessions at Detroit’s Metropolitan Airport. The 11,200 General Fund retirees don’t think it is too much to ask to see some of this money go to rescuing them.

To sign the petition supporting the Detroit retirees getting a pension booster go to https://chng.it/TYmxSNSPGP

Detroit retirees and supporters fought cuts to pension in 2013
Detroit retirees and supporters fought cuts to pension in 2013. | Photo: cnsnews.com

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