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Pension deal with retired police, firefighters lifts hopes in Detroit

NEW YORK — An organization representing retired firefighters and police officers has reached a deal with the City of Detroit that would prevent cuts to its members’ pensions, officials said Tuesday. The agreement could potentially help draw other groups of retirees and city workers into negotiated agreements, moving the city closer to emerging from the largest municipal bankruptcy in the nation’s history.

Still, the arrangement with the Retired Detroit Police and Fire Fighters Association, which represents about 6,500 retirees, is but one piece of a larger puzzle known as the plan of adjustment, Detroit’s blueprint for paying off portions of its $18 billion in debt. With time for negotiations running short, an array of groups representing the interests of Detroit’s 20,000 municipal retirees and 10,000 current employees are making intense efforts to reach agreements.

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A central point of contention has long been the prospect of cutting the pension checks of retired workers, despite protections of those benefits in the state’s Constitution. Under the agreement with the Retired Detroit Police and Fire Fighters Association, the current pension benefits of retired firefighters and police officers would remain intact, though cost-of-living increases could be smaller than they are now, according to a document released by court mediators.

The changes clearly suggested concessions from city officials, who had in earlier restructuring proposals contemplated cuts to the pension benefits of those retirees of at least 6 percent and an end to cost-of-living increases. Their earlier plans called for still larger cuts — of at least 26 percent — to the pensions for non-uniformed municipal retirees whose circumstances were not affected by the deal announced Tuesday.

Detroit does not need to have agreements with all of its more than 100,000 creditors to pay off parts of its debts and emerge from bankruptcy.

But the possibility of support from its retirees is tantalizing: It would probably give the plan of adjustment a better chance in court, where a federal judge must ultimately determine whether it is fair.

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