Detroit Delays Pension Freeze

    Protesters carry signs as they rally against cuts in city workers' pensions and the filing of the Municipal Bankruptcy, in front of the Federal Court House in Detroit, Michigan October 28, 2013. Detroit's emergency manager Kevyn Orr painted a picture of a city in dire financial straits in testimony on Monday, with budgets so strained that bumpers were falling off police cars, as he laid out the city's case of why a municipal bankruptcy filing was the only way back to health.       REUTERS/Rebecca Cook  (UNITED STATES - Tags: BUSINESS EMPLOYMENT POLITICS CIVIL UNREST) - RTX14RUY

    Rebecca Cook/Reuters

    Detroit emergency city manager Kevyn Orr on Monday delayed a pension freeze he ordered last month while courts negotiate in mediation for how best to deal with an estimated $3.5 billion pension underfunding. Orr’s Dec. 31 executive order suspended pensions, eliminated cost-of-living increases, and created a 401(k)-style plan for the city’s 5,600 active workers and 12,000 retirees in the general retirement system. Although the move only affected non-uniformed city workers, Orr had indicated he would soon make a similar order for the city’s police and fire retirement system. But the move came under sharp criticism from the city’s unions, and Orr’s spokesman said Monday that he agreed to hold off while a federal judge reviews the city’s bankruptcy proceedings.

    Read it at Detroit Free Press