April 15 Detroit reached a deal with a group representing police and fire retirees over the treatment of pensions and health care benefits, U.S. Bankruptcy Court mediators announced on Tuesday.
Under the deal, police and fire retired worker pensions would not be decreased, but cost-of-living increases would be cut in half, according to a court statement. It added that a separate voluntary employee beneficiary association plan or VEBA will be established for retiree health care.
The deal, which is contingent on more than $800 million in contributions for retirees from foundations, the Detroit Institute of Arts and the state of Michigan, marks the first between the bankrupt city and one of its retired worker groups, the Retired Detroit Police and Fire Fighters Association, which has about 6,500 members, the statement said. (Reporting by Karen Pierog; Editing by James Dalgleish)