Managing Volatility
In bankruptcy, the City of Detroit, Michigan, cut retiree benefits and closed its two pension funds, but it retained a substantial net pension liability. To address the net pension liability that remained, the city created an irrevocable trust fund as authorized under Internal Revenue Code (IRC) Section 115. Detroit’s Section 115 trust, the Retiree Protection Trust Fund (RPTF), will help the city smooth out spikes in annual required contributions (ARCs) in the years ahead.
Publication Date: April 2021
Author: James L. Tatum III
