Seeking to avoid a municipal bankruptcy similar to Detroit’s, the mayor of Cincinnati, Ohio in the U.S. unveiled his pension reform plan.  Mayor John Cranley’s plan includes expected deep cuts to benefits and an increase in expense for things such as healthcare, and also proposes removing control of the pension fund from the City Council and placing it in the hands of the Federal Courts using mediation.

Cincinnati, like Detroit and many other American cities, is far overcommitted on pension benefits, with payouts to pensions scheduled to outpace earnings in just a few years.  The city has already seen its credit rating cut by bond agencies, making borrowing more money to stay solvent increasingly difficult, and those same agencies have indicated that unless pension reform is affected, there will be a further downgrade in Cincinnati’s credit rating.

The city’s primary white-collar union, CODE, represents about 850 city workers and has expressed initial support for the mediation plan, as have six of the City Council’s nine members.  While the plan is far from a surefire success, this early support indicates that the affected players in Cincinnati are open to reasonable solutions that can prevent a disastrous collapse along the lines of Detroit, which last year became the largest municipal bankruptcy in United States’ history.