Detroit Pension Boards Challenge New Emergency Powers Law

April 20, 2011 (PLANSPONSOR.com) – Detroit workers’ pension boards have asked a court to declare unconstitutional a new law allowing state-appointed emergency financial managers to, among other things, impermissibly “seize control of retirement systems."

Bloomberg reports that the federal court suit alleges the law violates due process and equal protection clauses of the constitution and  would “impermissibly modify the Detroit city charter and various collective bargaining agreements between the city of Detroit and its uniformed and non-uniformed workers.” The law also authorizes “the modification and termination of constitutionally protected contract rights,” according to the complaint.

Filing the legal challenge were the General Retirement System of the City of Detroit, the Police and Fire Retirement System, and four individuals, including the chairs of both boards.

Governor Rick Snyder said the law, signed March 16, would help keep Michigan communities out of bankruptcy. Michigan has emergency managers running the schools in Detroit, as well as the cities of Pontiac, Ecorse and Benton Harbor, according to Bloomberg.  

The complaint is here.

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