Detroit city workers fight to save pensions
By Cheryl LaBash
Hundreds of people packed the Detroit City
County Building auditorium Jan. 8 for yet another Common
Council hearing on proposals to take away city employees'
lifetime pension benefits.
Although the ordinance affects only
political appointees, elected officials and non-union workers,
many of those testifying called it a foot in the door to
privatize the entire city pension plan.
Under the plan, workers, instead of receiving a full pension
benefit, would be individually responsible for investing a
"defined contribution" from the City. No benefits would be
The Common Council defeated a similar proposal in October.
The administration of Mayor Dennis Archer originally wanted to
privatize the entire pension system for all city workers, but
the municipal unions checked that move.
In a memorandum of understanding, the city agreed not to
push the issue in union negotiations until 2004. Determined to
chip away at the existing pension plan, though, the
administration pared down, altered, revised and resubmitted the
Scores of mayoral appointees, aides, department heads and
supervisors were mobilized to speak for the new plan on city
time at the hearing. Workers were not given the right to
testify during work time.
But retiree after retiree defended the pension system.
This attack on pension benefits is not an isolated, local
initiative. UAW Local 2334 President David Sole said that
big-business pressure to get rid of defined-benefit pension
plans is massive and widespread. The Wheeling-Pittsburgh steel
workers recently ended a 10-month strike that focused on just
this issue-the company's attempt to impose a
defined-contribution system that in effect does away with
guaranteed pension benefits to retirees.
"We know the banks and corporate giants are eager to grab up
the fat pension funds that are now publicly administered," Sole
said. His local represents city chemists.
Sole also exposed how the Heritage Foundation, a racist,
right-wing think tank, is involved. He called for a Common
Council investigation into its influence on elected officials,
saying: "Just two weeks ago Mayor Archer announced that he was
being strongly pressured by the Heritage Foundation to
privatize city services.
"The Heritage Foundation web site has page after page
singing the glories of privatized pensions and defined
contribution. They are pushing not only state and local pension
privatization, but even want to privatize the Social Security
"The Heritage Foundation is viciously anti-union and against
affirmative action and occupational health and safety."
Boon to Wall Street
Who benefits from getting rid of guaranteed pensions and
replacing them with "investments"? The real winners are the
employers, state and city governments included.
No longer are they required to pay a set pension amount for
the life of each worker. After the employer makes the so-called
defined contribution, the cost of administering the retirement
plan and all the risk and responsibility for future retirement
income are transferred to the individual worker.
The individual worker has no guarantees and the corporation
has no future economic responsibilities.
Did Wall Street investment bank ers demand that the city
privatize pensions to improve its Standard and Poor's and
Moody's bond ratings? Or did they just suggest that eliminating
pension liabilities would be a plus?
The Common Council vote on this ordinance has not been
scheduled. Four "nays" will defeat this attack. But it will
take the involvement and struggle of the ranks of city workers
to secure and strengthen their right to guaranteed lifetime
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