Pensions in play now that Detroit is officially in bankruptcy

In a devastating decision for pension holders, Bankruptcy Judge Steven W. Rhodes ruled this week that Detroit could officially claim bankruptcy relief under Chapter 9 of the Bankruptcy Code.  This was not completely unexpected; however, the judge went on to state that the city’s obligations with regard to pensions is not untouchable.  Judge Rhodes made it very clear that public employee pensions were not protected by the federal provisions in Chapter 9.  This could mean that those entitled to pension payments and benefits could see a reduction.

For more on this story read, “Detroit Ruling on Bankruptcy Lifts Pension Protections.”