Lower Funding Seen with Detroit Pension Plans

March 21, 2014 (PLANSPONSOR.com) – Over the last year, the funded status of Detroit’s two pension plans has decreased.

According to a recent news report from The Detroit News, the funded status of the Detroit Police and Fire Retirement System decreased from 96.1% to 89% as of June 30, 2013. Similarly, the funded status of the Detroit General Retirement System declined from 78% to 70% in 2013.

These declines in funding appear to be the result of millions of dollars in unpaid employer contributions from the city, says the news report. The city owes the Police and Fire pension fund $71 million for 2013 and the General pension fund is owed $36 million for the same time frame. Representatives for the two pension funds anticipate that the city will also be delinquent on its contributions during 2014.

While the city goes through its bankruptcy proceedings, it will not be able to make its contributions to the plans, according to the news report. Bill Nowling, a spokesperson connected with Detroit Emergency Manager Kevyn Orr, said in the news report that he anticipates the contributions being paid in the future and that negotiations to that end are ongoing.