Michigan’s governor is working with the state legislature to allocate up to US$350 million ($388.4 million) over the next 20 years to assist in saving retiree pensions by using tobacco settlement revenues.
“We are working on a fiscally sound mediation solution with clear conditions,” says Governor Rick Snyder. “We will not participate in a bailout, nor allow these funds to go anywhere other than directly to retiree pensions.”
But the offer comes with strings attached.
Among these conditions are that all state participation would go solely toward pensions, independent fiduciaries manage the pension funds going forward, and appropriate releases from litigation claims are obtained from the unions, employees and retirees.
Earlier this month, a coalition of foundations pledged US$330 million ($355.1 million) toward the city’s pension obligations in exchange for not selling the Detroit Institute of the Arts’ collection of art.
Related articles: