Detroit Bailout Bill Leaves Taxpayers On The Hook For New Pension Underfunding

Detroit Bailout Bill Leaves Taxpayers On The Hook For New Pension Underfunding [Michigan Capitol Confidential]:
A Michigan House committee on Wednesday approved a package of bills that gives a partial bailout to Detroit and continues to allow the city the ability to rack up unfunded retiree liabilities.
......Initially, one of the bills, House Bill 5568, would have ended Detroit's defined benefit pension system and shifted new employees to a defined contribution, 401(k)-type plan. 
The city had been using overly optimistic assumptions and funding practices that contributed to the bankruptcy.
Because of the underfunding, retiree benefits were gobbling up 40 percent of Detroit's general fund budget and were projected to be 70 percent in 2023.
Defined contribution plans cannot rack up unfunded liabilities.
But the bill was changed by the committee. 
The legislation that passed out of committee allows the city to leave open its pension plan and rack up liabilities in the future.
"The city may offer any retirement plan it wants," Committee Chairman Rep. John Walsh, R-Livonia, told The Detroit News.
......James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy, said the state should not leave worker retirement money in the hands of politicians by not closing the system.
"Detroit is in bankruptcy court asking for concessions from pensioners because the city underfunded the pensions it promised its employees," Hohman said.
"Are legislators going to prevent the city from being in this situation again or not? 
This bill says they will not."