Thousands of pensioners already struggling to get by are afraid they will be pushed into poverty if the city of Detroit is able to slash their benefits in a bankruptcy court. Retired fire chief Jerry Franklin Smith spent 39 years battling blazes in a city filled with abandoned buildings and too many arsonists.
He's worried that if a bankruptcy judge allows the city to wipe out its obligations to his pension fund he'll need to somehow find a job at the age of 78.
"I've only done physical things all my life. But I really can't do them anymore," Smith told AFP. "It makes you nervous." Police and fire-fighters don't qualify for the federally-run Social Security pension plan, which has an average payout of $1,268 a month. So their city-run plan is the only thing keeping them out of food banks or even homeless shelters.
Luckily it is better-funded than a separate plan run for Detroit's other municipal workers. But it is still owed millions and the city is hoping to slash all pension and retiree health care benefits in order to wipe out debt and reduce future costs.
Emergency manager Kevyn Orr was in court Friday urging a federal judge to find the city eligible for bankruptcy in the second such hearing since the birthplace of the US auto industry became the largest US city to go bust on July 19.
Orr has estimated that about nine billion dollars of the city's $18.5 billion in debt is owed to the pension funds and retiree health care benefits of the city's 10,000 workers and 20,000 retirees.
Unions and the pension administrators dispute his calculations and have filed suit to block any significant cuts, noting that pension benefits are protected by Michigan's constitution.
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