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Detroit Retirees Got Extra Interest After Guaranteed 7.9%

Unusual fund management involved money transfers from city pension to employee savings plan to make guaranteed interest paymentsand more in flush years.

By Chris Christoff, Bloomberg | Updated on December 02, 2013

Edna Love’s 58 years as a nurse for Detroit’s health department earned her a $2,000-a-month pension when she retired in 2011. That pales next to the $1 million she got from a separate city-sponsored savings plan where she put 5 percent of her pay year after year.

The annuity savings program within the Detroit General Retirement System created a class of privileged retirees in a city where pensions average about $19,000 a year, according to municipal records. The accounts got $756.2 million from the pension fund during 1985 through 2007 as extra interest, atop a guaranteed 7.9 percent backed by public money.

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