Detroit may be teetering toward bankruptcy, but nearly one in six police officers and firefighters are simultaneously collecting paychecks and pensions, the Detroit News reported yesterday. At a time when cities nationwide eliminated so-called DROP plans — deferred retirement option programs — Detroit started one in 2008. The program allows longstanding police and firefighters to keep working at full pay, while 75 percent of their annual pension payment goes into an account they cannot touch until they retire. When they do, they get a lump sum payout and can begin collecting their full pension. More than 600 police and firefighters — 17 percent of the ranks — have taken advantage, leading to numerous six-figure payouts. Foes fear the program is so popular it could drain the retirement system by leading to hundreds of early pension payouts.
To learn more about issues in chapter 9, be sure to pick up the latest ABI publication, Municipalities in Peril: The ABI Guide to Chapter 9, Second Edition, now up for pre-order in ABI's Bookstore.