The city of Detroit’s Plan of Adjustment establishes a Voluntary Employee Beneficiary Trust (VEBA) for the purpose of providing some level of health care benefits for current retirees. A review of the plan reveals it to be described as a “Health Care Plan for Police and Fire Retirees of the City of Detroit.” The general city retirees will have a separate VEBA. According to the plan the Board of Trustees will be responsible for “managing the property held by, and administration of, the Trust; and designing, adopting, maintaining and administering the “Health Care Plan for Police and Fire Retirees of the City of Detroit” through which all health care benefits to the Trust’s beneficiaries shall be provided…” The city’s funding plan for the VEBA is $232 million from the issuance of B notes and a contribution of $1.5 million from the city.

The Board of Trustees will have eight members and five of them have been named in the city’s latest Plan of Adjustment. Mayor Mike Duggan has selected Attorney Floyd Allen, with whom he worked with while running the Detroit Medical Center. The Retired Detroit Police and Firefighters Association (RDPFFA) has selected the following members:

Andy Dillon, former Michigan Treasurer who now works for Conway Mackenzie a firm involved in Detroit’s bankruptcy case

Al Grant, who is Secretary Treasurer of the RDPFFA

Greg Trozak, who is the Vice President of the RDPFFA.

The Official Committee of Retirees has selected Thomas Sheehan, who is a Trustee and Chairman of Detroit’s General Retirement System.

According to the plan, of the three remaining trustee positions two will be selected by Official Committee of Retirees and one non-voting position will be selected by the Retired Detroit Police Members Association. Each member of the Board shall serve a period of four years. The trustees will also be compensated in the amount of $12,000 per year in 2015 and 2016, except for the trustee holding the non-voting position. In 2017 the compensation is scheduled to be reduced to $6,000 per year unless the trustees vote (at least 6 to 1) to increase it; however, it can not be increased to more that $12,000 a year. Voting trustees will also be reimbursed for any reasonable expenses incurred in connection with attendance at board or board committee meetings.

Source: EXHIBIT I.A.106 FORM OF DETROIT POLICE AND FIRE VEBA TRUST AGREEMENT