A ruling in the Detroit bankruptcy case is raising questions in California. A Michigan judge has ruled the city does not have to pay pensions in full as it enters bankruptcy. Pension benefits generally have been seen as untouchable. Several cities in California have either filed or have considered bankruptcy.
Jeff Zack is with the National Firefighters Association, which is a labor organization. He said the Detroit ruling isn’t the last word.
“If the judge, when the city finally determines what it thinks it wants to pay, looks at what the city did and he says, as he intimates, that it is unfair, then he is going to make them go back to the drawing board. And that is going to be an important point going forward,” Zack said.
The Michigan ruling has no legal standing in California, and likely will be appealed.
Still, some pension experts believe it may be the first chink in the armor that has protected pensions for decades.
