Detroit bankruptcy threatens benefits of families of fallen cops
The City of Detroit, as part of its bankruptcy, plans to cut the pension and health care benefits families were promised
By Joe Guillen
Detroit Free Press
DETROIT — Three years after her husband was killed in the line of duty, Melissa Alexander-Huff and her son are still coping with the loss.
Detroit Police Officer Brain Huff was shot and killed in May 2010 as he entered a vacant east-side duplex to investigate a report of a break-in.
And now, like other survivors of Detroit police and firefighters killed in the line of duty, Alexander-Huff, 47, is facing the likelihood of another loss — this one, financial.
The City of Detroit, as part of its bankruptcy, plans to cut the pension and health care benefits Alexander-Huff was promised after her husband's death.
"It's not only cold, it's somebody demonic or evil that would only want to step in and include the widows in everything they want to cut and take away," she told the Free Press on Dec. 4. "Haven't we lost enough? Shall we bury ourselves and jump into the graves with our husband? Because that is what the City of Detroit is basically doing to us. They're killing us and our children."
Alexander-Huff and her 13-year-old son, Blair, are among 150 family members of Detroit police and firefighters killed in the line of duty who receive survivors pension benefits, according to the Detroit Police Officers Association.
Alexander-Huff, who was married to Huff for 11 years, said she and her son receive about $2,200 a month from the Police and Fire Retirement System, one of two pension funds for Detroit employees, after a deduction for health coverage. She said she receives about $730 a week in workers' compensation. The federal government also provided a death benefit of about $300,000, she said.
Detroit's bankruptcy threatens her city pension fund benefits. Because they are paid from the same fund as retired cops and firefighters, the surviving family members are considered in the ongoing bankruptcy case as creditors of the city, just like thousands of retired city workers.
Since the city was ruled eligible for bankruptcy, emergency manager Kevyn Orr has said he plans to cut pension benefits as part of his financial plan to stabilize Detroit. According to Orr, the city has about $18 billion in debt and liabilities, including about $3.5 billion in projected pension shortfalls and nearly $6 billion in unfunded retiree health care costs.
Bankruptcy Judge Steven Rhodes has ruled that pensions can be cut in bankruptcy. Rhodes, however, has warned Orr that his ruling doesn't mean he will approve a plan that includes pension cuts, and that any cuts must be "fair and equitable."
Orr insisted during a meeting with Free Press that he is aware of the "human dimension" of the city's bankruptcy and its impact on pensioners. But he also said he believes there is no way to fix the city's balance sheet without cutting pensions. He said he will be thoughtful and humane while doing so.
Alexander-Huff and others are hoping the widows and children left behind can be spared. She implored Orr to consider their plight.
"What if his wife was in this situation and he was a Detroit police officer?" she said. "Would he want her to lose her benefits? What would she be losing? Would he want his wife to be where we are? Yeah, he's an attorney. But what if he would've chosen a different path in life?"
Not much, but just enough
Diane Philpot, whose husband, Jerry Philpot, was a police officer killed in the line of duty nearly two decades ago, cannot fathom why benefits she and her daughter receive as survivors are on the chopping block.
"It's kind of like they said, 'Sorry he died, but I'm going to spit on his grave and wipe my boots. That's what I'm going to do because it's not part of our numbers,' " Philpot said.
The survivors also are subject to the same health care cuts as retirees, meaning widows younger than 65 would receive a $125 monthly stipend for health care under Orr's proposed health care changes.
Philpot, 52, of Brownstown Township got a letter from the city about the cuts and was told that her health care benefits would be replaced with the stipend to buy insurance on the open market.
"I actually just started working at JCPenney," she said. "I wanted to find something so I could try and afford to have money to pay for health care, because that $125 isn't going to do (anything)."
Philpot, who became active in an organization that supports the families of fallen law enforcement agents, said she receives about $24,000 a year from the pension fund. Even with state and federal benefits on top, the compensation is inadequate, she said.
"Everybody seems to think it's a lot of money, and it's not. It doesn't go very far," she said. "Really, I'd rather have my husband back and let him work for the next 20 years."
Jerry Philpot was 28 when a gang member gunned him down in an alley in 1995. Daughter Katelyn was not yet 1 when he died. Diane Philpot said the financial help allowed her to raise her daughter as a single mom.
"Even though this is a small pension, and the benefits, it allowed me to be able to stay home with my daughter," Diane Philpot said. "We did without a lot because there isn't a lot of money. But it was enough for me to be able to get by and be there for her as a parent. That is worth more than they could possibly even give you."
Andrea Torkos remembers the assurances from city officials that her family would be cared for. Her husband, firefighter Joseph Torkos, was killed in 2007 when a speeding SUV driven by a man without a driver's license and cocaine in his pocket struck a fire rig as it was responding to an emergency call. Joseph Torkos was 47.
She and her two daughters Monika, 8, and Nicole, 6, have come to rely on the health care coverage and $1,950 monthly pension the city and pension fund provides to get by. Andrea Torkos said she also receives workers' compensation, but she has vowed to set all that money aside for her daughters' futures.
Torkos, who lives in Troy and does not have a job, said she wants to go back to school. She was studying to be a pharmacist when her husband died.
"I don't know. There's just no way to survive on anything lower than this," she said. "The other major creditors, the banks, I'm sure they have insurance. But we don't."
Any cut takes a toll
Ellis Liddell, president and CEO of ELE Wealth Management in Southfield, has advised many retirees from the City of Detroit on how to manage their pensions. He said any cut to a police widow's income can have repercussions because costs are rising.
"We live in a world where everything is going up and nothing is going down," Liddell said. "If someone is forced to take a cut -- whether it's 10%, 15%, whatever percentage cut it is -- it affects their overall budget and it limits their ability to save."
Liddell suggests that to prepare for the possible pension cut, widows, widowers and retirees start by meticulously tracking expenditures to gain an understanding of their financial position and identify areas to trim spending. Then, he said, make a list of 10 people who could potentially help in a financial emergency.
In the most recent fiscal year, which ended June 30, the Detroit police and firefighters pension fund paid out nearly $3.1 million to the spouses and children of police officers and firefighters killed in the line of duty.
Survivors' benefits are determined by a formula, included in the police union's contract, that factors in the size of the police officer's family.
The federal government provides assistance as part of the Public Safety Officers' Benefits Program, which is administered by the U.S. Department of Justice and other agencies. Currently, the death benefit is $333,604. It was set at $130,416 at the time of Philpot's death and $311,810 when Huff died.
Holding onto promises
Alexander-Huff is currently unemployed and lives near Orlando. She spends much of her time raising Blair, 13, who took his father's death hard, she said. Pension cuts might force her to move back to Michigan with her mother, Alexander-Huff said.
She said her plan is to become an esthetician. After her husband's death, she said, she was told her future education costs would be covered, but she's not sure that's still the case.
Orr's spokesman, Bill Nowling, said the potential pension and health care cuts to police survivors and retirees are being discussed in private negotiations that involve lawyers for the city, labor and retiree groups and pension funds.
Andrea Torkos remembers how city officials where there for her after her husband's death.
"When he died, the whole city council had tears in their eyes presenting me with the resolution" to honor her husband, Torkos said.
"Everyone was so promising," she recalled. "Now all the promises are going down the drain."
While worrying about her future, Alexander-Huff holds onto pieces of the past.
Around her neck, she wears her late husband's wedding ring and a heart-shaped pendant that contains some of his remains. She broke down in tears at the thought of raising Blair with less financial support from the city.
"I made my husband a promise that at any time -- if something happened to him on this job -- that I would make sure that our son was taken care of. If they take these promises away, how do I take care of him? I would feel like a failure of a mother. And if it wasn't for looking into this boy's eyes, I wouldn't have no reason to live."
Copyright 2013 the Detroit Free Press