According to this New Yorker blog post, a federal judge has said Detroit could legally cut the pensions it has already promised to workers as part of its bankruptcy plan, even though the Michigan constitution says the government can’t go back on pension promises. The justification for this decision is that federal law supersedes state law "and, according to Judge Steve W. Rhodes, pension cuts are just fine under federal law."

Retirees who are counting on pensions for their retirement and as a result have no other savings to rely on will be left high and dry if more cities do what Detroit is doing.

According to the Beacon Hill Institute, Massachusetts faces a $23 billion pension liability that is currently unfunded. Cities and towns across the state face billions more in unfunded pension liabilities.

What does our future hold? Are we doing to leave retirees in the lurch, a la Detroit? Or will we act now to implement prudent reforms that allow us to make good on our promises but stop promising more than we have.


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