The Detroit Free Press defends their home town against mischaracterizations in the national press with the first installment of The Truth About Detroit
What was said: “Government employees and their overbearing unions have been on a decades-long crusade to defraud the taxpayer and unjustly enrich themselves. When everyday Americans are struggling to find job security and save for retirement with defined contribution plans, selfish and greedy public-sector unionists have unparalleled job security and retire with golden parachutes (that) would make any middle American look like a pauper in comparison.”
Reality: The average annual pension for retired Detroit police officers and firefighters is about $34,000, roughly half that of such pensions in Los Angeles and Chicago, 25% less than in Kansas City, Mo., and 36% below benefits for those in Dallas. Retirees from Detroit’s general city pension fund receive, on average, less than $20,000 a year.
“Even by Michigan standards, these are not fat pensions,” said Leon LaBrecque, , managing partner with the financial advisory firm LJPR in Troy. “I see a lot of these people, and their pay is lower and their multipliers are lower than retirees in Grand Rapids or Lansing or Warren or the (Michigan) State Police.”
One factor that has made Detroit’s pension underfunding worse: There are only 3,200 active workers paying into a system that pays benefits to 9,300 retirees. In Chicago, 12,026 actives pay into a fund that supports 9,035 retirees.
This isn’t a problem for defined contribution plans. At Forbes, Jeffrey Dorfman writes about this.