The annuity savings program within the Detroit General Retirement System created a class of privileged retirees in a city where pensions average about $19,000 a year, Bloomberg News reported yesterday. The accounts got $756.2 million from the pension fund during 1985 through 2007 as extra interest, atop a guaranteed 7.9 percent backed by public money, according to municipal records. The use of money from the $2.6 billion pension to bolster the savings accounts has drawn scrutiny from Kevyn Orr, the state-appointed emergency manager, whose plan to reduce Detroit pensions through the largest U.S. municipal bankruptcy stirs outrage among 20,000 retirees. Orr may recoup what the fund paid to the savings program, said his spokesman, Bill Nowling. “There has to be a reckoning of what was legitimate interest for those annuity funds, and what was largess added by the pension board,” Nowling said. “There is some argument that that money belongs to the city, and creditors could try to claim it.” Orr has said that Detroit’s general retirement plan and its pension for police and firefighters are underfunded by a combined $3.5 billion, a figure system officials and unions call inflated.
