Attorney General: Michigan Constitution Protects Detroit Pensions

Jul 27, 2013

Michigan Attorney General Bill Schuette is siding with city employees and pension funds that say those benefits should not be part of Detroit bankruptcy proceedings. Schuette plans to be in court Monday to file a request to join the case.

The Attorney General says the Michigan Constitution specifically protects public employee pension benefits from being impaired or diminished.

It will be up to U.S. Bankruptcy Judge Steven Rhodes to rule on that issue, after he dismissed three lawsuits filed in Ingham County that tried to keep pension benefits from being part of a bankruptcy settlement.

Schuette’s position could put him at odds with Governor Rick Snyder and Detroit Emergency Manager Kevyn Orr. Pension funds are among the city’s biggest creditors.

Schuette also represents the governor in the bankruptcy proceedings, but says his office is capable of working for both sides, if it comes to that.

Governor Snyder’s press secretary says he appreciates Schuette’s efforts to bring clarity to the question of whether pension benefits can be part of the bankruptcy.