Rewarding Incompetence and Corruption With Your Tax Dollars
Mayor Mike Duggan startled Michigan yesterday by disclosing that Detroit found the actuarial accrued liability (AAL) in their pension plans to be $ 491 million higher than that calculated in their U.S. Bankruptcy Court Plan of Adjustment. The very expensive Detroit bankruptcy consultants used an outdated version of the IRS Static Mortality Table when calculating Detroit’s future pension payments. Detroit’s unfunded actuarial accrued liability (UAAL) was not the $ 731 million stated in the Plan of Adjustment, rather it was $ 1.222 billion. Big money in a city whose total governmental revenues were $ 1.415 billion in FY 2014. Mayor Duggan blames erstwhile Emergency Manager Kevyn Orr for this little oversight, but others were also responsible.
No word yet from the Great Lakes Water Authority whether all those Detroit Water & Sewerage Department employees they absorbed from the City of Detroit have the same AAL calculation error in their pension funding schedules. You can bet they did, and the suburban geniuses politicians who spent a year doing due diligence also missed it. The DW&SD pension funding schedules were determined by the same very expensive bunglers who wrote the Detroit Plan of Adjustment.
(16)Nuh Uh.
(0)
