Detroit reaches deal with retired police and firefighters
If approved, the deal would significantly limit proposed cuts in pension benefits for the public safety retirees.
Bankruptcy mediators said the agreement with the Retired Detroit Police and Fire Fighters Association was the first the city had reached with any group representing its retirees.
The association has about 6,500 members and represents more than 80% of Detroit's retired public safety workers.
Under Tuesday's deal, retirees would suffer no cuts to their current pension benefits and would receive approximately half of their annual cost of living increases moving forward.
The biggest hole in Detroit's finances is to pay for health care for current and future retirees and their families. The mediators said Tuesday a fund would be established for retiree health care costs but did provide offer details.
Detroit, which filed for bankruptcy last July, faces a multi-billion dollar hole in its two pension funds -- one for public safety workers and one for general city employees.
Kevyn Orr, the lawyer appointed to steer Detroit through bankruptcy, had proposed cutting police and fire pensions by up to 14% and eliminating annual cost of living increases. He proposed far deeper cuts of up to 34% for general city workers and retirees. Orr has also proposed deep cuts in retiree health care benefits.
Spokespeople for the two funds said on Tuesday they were also in talks with the city.
Someone close to the negotiations, but not authorized to speak on the record said the parties were 'close on a lot of fronts' but did not elaborate.
--CNN's Poppy Harlow and CNNMoney's Chris Isidore contributed to this report. 
First Published: April 15, 2014: 12:58 PM ET
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