DETROIT, July 22 (UPI) -- Detroit retirees and city workers have approved a bankruptcy plan that spares them major pension cuts.
Police officers and firefighters will maintain their base pensions but give up some cost-of-living increases. Those in the General Retirement System face a 4.5 percent cut in payments.
The votes were tabulated Monday with 82 percent of police and firefighters backing the cuts and more than 70 percent of those in the GRS.
But the holders of some general obligation bonds and two financial institutions that guaranteed a pension debt deal rejected offers to pay them a fraction of what they are owed.
"We understand why the retirees and unions voted in favor of the city's plan -- if we were offered a similar deal, we, too, would approve the plan," Financial Guaranty Insurance Company said in a statement.
City employees would have faced far bigger cuts except for the "grand bargain" made to avoid the sale of one of the country's great art collections in the city-owned Detroit Institute of Arts. The state of Michigan agreed to contribute $195 million immediately to the pension system and foundations and corporations pledged $466 million over 20 years.