DETROIT, Mich. (Michigan News Source) — Detroit and its Police and Fire Retirement System (PFRS) have settled a federal lawsuit, agreeing to a 30-year repayment plan for deferred pension obligations. This extended timeline gives Detroit additional flexibility to meet its pension commitments without adding immediate strain to its budget, while also ensuring ongoing support for retired and active-duty first responders.

The PFRS board initially advocated for a 20-year repayment schedule, arguing it would bring money into the fund more quickly.

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City officials, however, argued that the shorter timeline would increase Detroit’s annual pension costs by roughly $20 million, potentially impacting essential services. 

Following negotiations, both sides agreed to the 30-year schedule, which requires the city to make quarterly payments beginning in fiscal year 2025 and continuing through 2029 and beyond. 

These payments are intended to ensure consistent funding for the $2.8 billion fund, which serves approximately 8,000 retired and 3,000 active-duty Detroit police officers and firefighters, according to the Detroit Free Press.

This quarterly structure is intended to help maintain the pension system’s stability over the long term, using a level-principal amortization approach that the PFRS board believes will better serve its members. 

“For both the PFRS and the city, the goal is to put as much money into the retirement system as quickly as possible for the benefit of our members,” PFRS Chairman Jeffrey Pegg said.