Detroit City Pension Plans Frozen

For non-uniformed employees


Emergency Manager Kevyn Orr has frozen Detroit's pension benefits for about 5,600 non-uniform employees, closing the General Retirement System to all new employees effective Dec. 31.

Orr's Dec. 30 action freezes earned pension benefits for employees in the General Retirement System and creates a new 401(k)-style defined contribution retirement plan for existing and future city workers starting Jan. 1, according to a copy of the emergency manager's order obtained by The Detroit News.

As part of the order, Orr also eliminated the pension "escalator," effectively eliminating any future cost-of-living increases for all retired city employees in the General Retirement System.

The emergency manager's order also closes the pension system's Annuity Savings Fund, an added benefit for some municipal workers. Under the order, years of service and final annual compensation used to calculate pensions will be frozen and the city will make no other contributions to the fund.