Orr freezes pensions for Detroit workers, ends cost-of-living adjustments
Source: Detroit Free Press
Detroit emergency manager Kevyn Orr quietly issued a freeze on the pensions of city workers as of Dec. 31, meaning no new benefits will be accrued for members of the General Retirement System and pensions will be closed to all new city employees, according to an executive order released by Orr’s office.
The move prompted outrage from the retirement system, whose spokeswoman, Tina Bassett, called the order “an outrageous and over-zealous action from the EM’s office.”
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The order also closes the retirement system’s Annuity Savings Fund to new employees, and it will stop accepting contributions sometime this month. The order also ends future cost-of-living adjustments.
Instead of pensions, Orr’s order said the city will create a 401k-style savings plan.
Read more: http://www.freep.com/article/20140106/NEWS/301060055/Detroit-pension-freeze-Orr
= new reply since forum marked as read
... the hope is that what it's invested in will spend wisely and make profits, thereby increasing its value.
Your savings are not taken from the economy. They may be taken from the local economy, the local shop owners.
If you can afford to save, it's absurd not to.
I am not a professional financial planner or economist. My opinion is worth what you paid for it.
401k mutual funds is not being spent locally. So we buy stock, the companies we invest in then take that money and build new factory capacity in China or Mexico. Makes perfect sense! 
