Foundation pledges for Detroit pensions, art rise to $370 million

Reuters News
Posted: Jan 28, 2014 4:57 PM

(Reuters) - Foundations seeking to protect Detroit's public pensions and its art museum in the city's bankruptcy process raised their pledge total to $370 million on Tuesday with the addition of a $40 million commitment from the W.K. Kellogg Foundation.

A group of U.S. philanthropic foundations announced earlier this month that they were prepared to step in with funding assistance to help preserve the Detroit Institute of Arts' collection and assist in shoring up the cash-strapped city's employee pensions.

Michigan Governor Rick Snyder followed up that commitment with a plan he unveiled last week to tap up to $350 million in state funds over 20 years for Detroit retirees.

"The Kellogg Foundation's commitment strengthens this effort, and we are hopeful the fund will continue to attract commitments from individual donors and institutions," said a statement from the foundation working group, which includes the Ford Foundation and the Kresge Foundation.

Kevyn Orr, Detroit's state-appointed emergency manager who took the city to U.S. Bankruptcy Court in July, has opened the door to monetizing city-owned works at the institute, which have been appraised at as much as $867 million. Orr has also eyed severe cuts in the city workers' retirement benefits. Detroit's two pension funds are the city's biggest unsecured creditors and Orr has pegged the unfunded pension liability at $3.5 billion.

(Reporting by Karen Pierog in Chicago; editing by Matthew Lewis)