Pension Restoration Program

GRS Pension Restoration Program

The GRSD worked diligently to ensure that pension restoration was included in Detroit’s plan of adjustment.

The program would allow for the potential restoration of accrued benefits, including cost of living adjustments (COLA) and Annuity Savings Fund (ASF) Recoupment, which were reduced as part of the Plan of Adjustment.

The Restoration Program is wholly driven by the GRS Funded Level. The program would be supervised and administered by the GRS Board, a newly formed independent Investment Committee, and Restoration flows through 3 Waterfall Classes of GRS participants.

Waterfall Classes

There are three Waterfall Classes: 

  1. Waterfall Class 1 – Retirees in retirement benefit pay status as of June 30, 2014, and their surviving spouses and beneficiaries. 
  2. Waterfall Class 2 – Retirees who entered into retirement benefit pay status after June 30, 2014, and their surviving spouses and beneficiaries, and who are in pay status as of the end of the GRS Fiscal Year prior to the year in which the restoration decision is made. 
  3. Waterfall Class 3 – All other GRS participants who are not in retirement benefit pay status.

Restoration of Benefits

  • If the projected funded level is above the Restoration Target, assets are transferred to a Restoration Reserve. 
  • If assets in the Reserve are sufficient to fund a restoration increment for the actuarial life expectancy to a Waterfall Class, restoration is provided: 
    • 4.5 percent benefit cut is restored in 0.5 percent increments until full restoration of 4.5 percent to each Waterfall Class
    • COLA restored in 10 percent increments to Waterfall Classes in accordance with schedule 
    • ASF may be recouped as well – first non-retirees to retiree level, then all other ASF participants.

PERMANENT RESTORATION

Generally, in the event the projected funded level falls below the applicable funding target, transfer of assets from the restoration reserve to the pension plan will occur and future restoration benefits may be suspended, diminished or terminated.

In the event the GRS satisfies the permanent restoration targets in 2028, 2033 and 2043, (an additional 1 percent outperformance above restoration trigger); restoration benefits in effect at that time which are fully funded shall be permanently restored and not subject to suspension, diminishment or termination.

Current News That May Interest You:

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Nov

03

Active Employees married to a City of Detroit Retiree are now eligible to enroll their spouse for health care coverage effective January 1, 2017

Please visit the online system www.mydetroitbenefits.com to enroll your retired spouse. Eligibility Documentation is required. You may also call toll-free (855) 224 6200 to compl...

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Mar

16

Last call for retirees to collect health funds

Time is running out for thousands of city retirees who are eligible to recoup millions in out-of-pocket costs for medical co-pays and prescriptions they paid for last year.

Read More »

Important Retirement System News You Need To Know Learn More ›

A Message from GRSD Chairman Tom Sheehan Read Letter ›


 

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