Monday, April 28, 2014

Sources: Lump sum Detroit pension payment could save Michigan 45%

Sources: Lump sum Detroit pension payment could save Michigan 45% | The Detroit News
Lansing — The state of Michigan could pay nearly half the $350 million Gov. Rick Snyder has pledged toward Detroit pensions to settle the city’s bankruptcy if lawmakers provided the cash up front, The Detroit News has learned.
Detroit’s latest debt-cutting plan spells out for the first time a mathematical method for the state to make a lump sum discounted payment of the present value of $350 million over 20 years, which three sources tell The News would be about $190 million — a 45 percent savings. The sources spoke on condition anonymity because of ongoing confidential negotiations.

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