A board on Monday approved a $195 million payment that Michigan will make to Detroit’s pension system as part of the city’s plan to avoid steeper benefit cuts.
From the Lansing State Journal:
Detroit’s two pension funds are expected to receive the state’s “grand bargain” bankruptcy contribution of $194.8 million on Feb. 9 after a state panel gave final approval to the payments on Monday.
The three-member Michigan Settlement Administration Authority approved the payments after board members were advised all legal claims against the state related to the largest municipal bankruptcy in the nation’s history had been dismissed.
The authority — made up of Treasurer Kevin Clinton, Budget Director John Roberts, and Huntington Woods attorney William Cohen — is not expected to meet again. Its sole function was to oversee payment of the state’s contribution to a grand bargain that helped settle the bankruptcy. The Legislature approved the payments last May.
The state’s contribution is part of more than $800 million raised from foundations, private donors and the Detroit Institute of Arts to shore up city pension funds and protect a sell-off of the DIA’s collection of artwork during Detroit’s Chapter 9 proceedings, which ended this month.
The money will go into the investment funds of the two pension funds.
The state is financing the payments from a fund established from money it received through the settlement of a multi-state lawsuit against tobacco companies.
Detroit will reportedly receive the money on February 9.
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