The city of Detroit reached a deal with a group of retired police officers and firefighters that would protect pensions but trim annual cost-of-living payments — the first major agreement with retirees in the bankruptcy case, mediators announced Tuesday.
The city retreated from an earlier proposed 6 percent cut in pensions and the elimination of the 2.25 percent cost-of-living payment. Leaders of the Retired Detroit Police and Fire Fighters Association, which has more than 6,000 members, endorsed the deal along with creation of a health plan.
Bill Nowling, a spokesman for emergency manager Kevyn Orr, who took the city into bankruptcy last summer, said Detroit believes it can afford the compromise partly because the pension fund's financial performance has improved along with Wall Street markets.
Orr thanked the association and urged more creditors to make deals.
"The time to resolve our differences is now," he said in a statement.
The agreement still is subject to a vote by retirees, starting in May, as well as current employees who are eligible for a future pension. It also must go through Judge Steven Rhodes as part of Detroit's larger plan to exit bankruptcy by fall.