March 22, 2022
Dear Mayor Duggan and Members of City Council:
General Fund Retirees are once again asking the Mayor and City Council members for a $1400 one-time payment to help provide relief and mitigate the financial hardship of the pandemic.
Mayor Duggan and some council members publicly stated that they believe language in the Plan of Adjustment and the Federal rules governing American Rescue Plan Funds prohibit/forbid a payment to rescue retirees. We believe the mayor and those council members are wrong and have mis-interpreted our request and the language from in the fore mentioned documents.
Below is the language from the Plan of Adjustment and Fiscal Recovery Fund rules. While this language does address calculation of pensions and deposits to pension plans, the language doesn’t forbid the General Fund Retirees’ request for a one-time payment to help mitigate hardships caused by the pandemic.
We are not asking for our pensions to be recalculated or changed, nor are we asking the city to deposit any funds into the General Fund Retirement System. We are asking our City officials to help General Fund Retirees during this catastrophe pandemic where the majority of the casualties are senior citizens. The rules governing the uses of these funds are clear: to mitigate public health emergency and financial hardship. It’s clear retirees have suffered and qualify for relief under the Federal guidelines.
Amendment Plan #8 of Adjustment, pg. 42
H. No Changes in Terms for Ten Years.
Except as may be required to maintain the tax-qualified status of the GRS or to comply with the terms of the Plan, the City, the trustees of the GRS and all other persons or entities shall be enjoined from and against the subsequent amendment of the terms, conditions and rules of operation of the GRS, or any successor plan or trust, that govern the calculation of pension benefits (including the GRS Adjusted Pension Amount, accrual of additional benefits, the DIA Proceeds Default Amount, the Prior GRS Pension Plan, the GRS Restoration Payment, the New GRS Active Pension Plan Formula and the terms of the New GRS Active Pension Plan) or against any action that governs the selection of the investment return assumption described in Section II.B.3.r.ii.B, the contribution to the GRS, or the calculation or amount of GRS pension benefits for the period ending June 30, 2023, notwithstanding whether that subsequent amendment or act is created or undertaken by contract, agreement (including collective bargaining agreement), statute, rule, regulation, ordinance, charter, resolution or otherwise by operation of law.
Coronavirus State & Local Fiscal Recovery Funds, Interim Final Rules, frequently asked Questions as of 1/22
8.1. What is meant by a pension “deposit”? Can governments use funds for routine pension contributions for employees whose payroll and covered benefits are eligible expenses? Treasury interprets “deposit” in this context to refer to an extraordinary payment into a pension fund for the purpose of reducing an accrued, unfunded liability. More specifically, the interim final rule does not permit this assistance to be used to make a payment into a pension fund if both: (1) the payment reduces a liability incurred prior to the start of the COVID-19 public health emergency, and (2) the payment occurs outside the recipient’s regular timing for making such payments. Under this interpretation, a “deposit” is distinct from a “payroll contribution,” which occurs when employers make payments into pension funds on regular intervals, with contribution amounts based on a predetermined percentage of employees’ wages and salaries. In general, if an employee’s wages and salaries are an eligible use of Fiscal Recovery Funds, recipients may treat the employee’s covered benefits as an eligible use of Fiscal Recovery Funds.
If City Officials still insist a rescue payment to retirees cannot be made because it will be interpreted as a pension payment, let us offer you a clear path to make this payment as Other Post-Employment Benefits, OPEB through the VEBA board per the language below.
Other Post-Employment Benefits, OPEB
Coronavirus State & Local Fiscal Recovery Funds, Interim Final Rules, frequently asked Questions as of 1/22
8.2. May recipients use Fiscal Recovery Funds to fund Other Post-Employment Benefits (OPEB)? [6/8] OPEB refers to benefits other than pensions (see, e.g., Governmental Accounting Standards Board, “Other Post-Employment Benefits”). Treasury has determined that Sections 602(c)(2)(B) and 603(c)(2), which refer only to pensions, do not prohibit AS OF JANUARY 2022 35 CSFRF/CLFRF recipients from funding OPEB. Recipients of either the CSFRF/CLFRF may use funds for eligible uses, and a recipient seeking to use CSFRF/CLFRF funds for OPEB contributions would need to justify those contributions under one of the four eligible use categories.
Qualifying Category #1 of Fiscal Recovery Funds use:
1. Address public health needs and economic damage from the pandemic. Respond to the
pandemic and its negative economic impacts.
Language from 8th Amendment of Plan of Adjustment OPEB pg. 42
ii. Treatment
A. Detroit General VEBA … Detroit General VEBA to provide health benefits to Detroit General VEBA…and determination of the level of and distribution of benefits to Detroit General VEBA beneficiaries.
We hope this gives you the necessary information to honor our request. We have asked in both of our earlier requests for a meeting with you to discuss this matter. Unfortunately we have not been granted a meeting by any of our Elected Officials to date. Remember we are the workers who ran the city and we are the people who vote.
Thank you for your consideration of this matter. We look forward to hearing from you.
Sincerely,
David Sole, davidsole48@gmail.com, 313-886-4558
Yvonne Jones, yvonne001@ameritech.net, 313-580-7314
William Davis, montybill86@yahoo.com , 313-622-6430
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