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The 2014 Pension 40: Steven Rhodes

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Steven Rhodes
U.S. Bankruptcy Judge
Eastern District of Michigan
PNR

On November 7, U.S. bankruptcy judge Steven Rhodes, 65, approved Detroit’s financial restructuring plan, putting an end to the largest municipal bankruptcy case in U.S. history. The deal prunes $7 billion of debt from the cash-strapped city’s balance sheet over the next decade while protecting public pension obligations from deep cuts — an area of contention for public sector unions since Detroit filed for Chapter 9 bankruptcy protection on July 18, 2013. Rising pension costs played a significant role in the bankruptcy filing. According to Rhodes’s November ruling, the Detroit retirement system will not receive payments from the city until 2024 and instead will rely on contributions from other parties, including nonprofit foundations and the state of Michigan. General beneficiaries will suffer 4.5 percent benefit cuts and will no longer receive annual cost-of-living adjustment, and police and fire pensioners will face reduced COLA increases. Rhodes, who earned a JD from the University of Michigan Law School in 1973 and became a federal bankruptcy judge in 1985, lauds the outcome: “It is a vast understatement to say that the pension settlement is reasonable. It borders on the miraculous.” He admits the pension reductions will cause hardships for creditors and pensioners alike. Detroit officially emerged from bankruptcy on December 10.

The 2014 Pension 40

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Bruce Rauner
Illinois
John and
Laura Arnold

Laura and John
Arnold Foundation
Randi Weingarten
American Federation of Teachers
Rahm Emanuel
Chicago
David Boies
Boies, Schiller & Flexner
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10
Randy DeFrehn
National Coordinating Committee for Multiemployer Plans
Damon Silvers
AFL-CIO
Laurence Fink
BlackRock
Chris Christie
New Jersey
Robin Diamonte
United Technologies Corp.
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Ted Eliopoulos
California Public Employees’ Retirement System
John Kline
Minnesota
J. Mark Iwry
U.S. Treasury Department
Gina Raimondo
Rhode Island
Phyllis Borzi
U.S. Labor Department
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Orrin Hatch
Utah
Abigail Johnson
Fidelity Investments
Ted Wheeler
Oregon
Caitlin Long
Morgan Stanley
James Hoffa
International Brotherhood of Teamsters
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Amy Kessler
Prudential Financial
Alejandro
García Padilla

Puerto Rico
Christopher Klein
U.S. Bankruptcy Court for the Eastern District of Caifornia
Steven Rhodes
Bankruptcy Court for the Eastern District of Michigan
Kevin de León
California
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David Draine
Pew Charitable Trusts
Jordan Marks
National Public Pension Coalition
Sam Liccardo
California
Joshua Rauh
Stanford Graduate School of Business
Karen Ferguson and Karen Friedman
Pension Rights Center
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Timothy Blake
Moody’s Investors Service
Kathleen Kennedy Townsend
Center for Retirement Initiatives, Georgetown University
Edward (Ted) Siedle
Benchmark Financial Services
Daniel Loeb
Third Point
Judy Mares
Employee Benefits Security Administration, U.S. Labor Department
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Andrew Biggs
American Enterprise Institute
Andy Stern
Columbia University
Kenneth Mehlman
KKR & Co.
Teresa Ghilarducci
New School for Social Research
A. Melissa Moye
U.S. Treasury Department


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