Detroit pension funds announce possible theft of prepaid cards

The city of Detroit’s pension systems – which cover police and fire departments as well as general retirees – may have lost up to “several hundred thousand dollars” through a payment card scheme that is the subject of an ongoing Michigan State Police investigation.

A former employee of the combined Police and Fire Retirement System and the General Retirement System – both of which cover about 19,000 current retirees and about 8,000 current employees – was the target of a Michigan State Police investigation, according to a statement from the City of Detroit’s Retirement Systems late Friday afternoon.

The former employee was taken into custody by Michigan State Police on Wednesday, the press release said. No further details were provided. Michigan State Police were unable to answer questions as of Friday afternoon.

The case under investigation involves money paid out through prepaid payment cards, which are typically used by retirees without bank accounts, or so-called “unbanked consumers.” According to Bruce Babiarz, a spokesman for the Detroit Police and Fire Retirement System, about 120 retirees use such prepaid cards.