Dear City Employee, Thank you for your hard work and dedication to improving the services we provide to all the residents of the City of Detroit. You are making a difference and the positive results are more visible each day. I am sending you this email to explain important changes to your pension plan and paycheck that will begin to take effect in the next several weeks, over multiple payroll periods. First of all, most members of bargaining units that have ratified a new contract by June 25 will be seeing a slight increase in their paycheck amount. Those amounts will vary based on each individual bargaining agreement. In addition, the City will transition to hybrid pension plans for current and future employees on July 1. This change will strengthen the City’s pension funds while continuing to maintain defined benefit retirement programs for employees. Because it will be offering hybrid pension plans effective July 1, the City will freeze benefit accruals under the current Police & Fire Retirement System and General Retirement System effective June 30. Employees who have earned benefits through June 30, 2014, and have vested or will vest in either the PFRS or GRS pension funds, will receive those benefits when they reach their allowed retirement age and length of service. Some employees will be able to elect to have a portion of their banked sick leave included in their average final compensation calculation as of June 30, 2014 under current GRS and PFRS plans. No new contributions may be made to the Annuity Savings Fund after June 30. Any amounts credited to your Annuity Savings Fund account will continue to earn interest until distributed to you or added to your retirement allowance when you retire. On July 1, all current employees will begin to earn benefits under the new GRS hybrid pension plan or the new PFRS hybrid pension plan. All city employees will make a small mandatory pre-tax contribution to their new hybrid pension plan. The city will also contribute to the new hybrid pension plans. When you retire, you will receive the benefits you earn under your new hybrid pension plan, in addition to any benefits you earned through June 30 under the current GRS or PFRS plans. Some employees may also make voluntary after-tax contributions to their hybrid pension plan. Payroll deductions for mandatory pre-tax contributions will begin with mid-July payrolls. If you elect to make voluntary, after-tax contributions, your payroll deductions will begin as soon as possible after July 1. The City will hold a public hearing regarding the proposed ordinance changes necessary to freeze the current GRS and PFRS pension plans and enact the new hybrid pension plans at 10 a.m., June 24 in the Erma L. Henderson Auditorium on the 13th floor of the Coleman A. Young Municipal Center. Additional information about the pension changes, as well as copies of the proposed ordinances, can be found on the Emergency Manager’s website at detroitmi.gov/emergencymanager . If you have any further questions about the details of your bargaining agreement, please feel free to contact your union representative or department director. Sincerely, Kevyn D. Orr Emergency Manager
Posted on: Wed, 18 Jun 2014 20:20:11 +0000
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