Detroit Bankruptcy Ruling: Implications for Public Pension Plans

by Thomas A. Dubbs

December 01, 2013

 

Once the prosperous center of America's automobile industry and the birthplace of Motown music, Detroit now has a new title—the largest bankrupt city in U.S. history. It is also the largest U.S. municipal bankruptcy by debt, estimated at more than $18 billion, including $3.5 billion in unfunded pension liabilities to the city's two largest unsecured creditors—its two pension plans. These plans represent more than 32,000 active and retired city employees whose pensions are now directly at risk in Detroit's unfolding bankruptcy.

 

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