DETROIT, Jan.

31, 2014 -- In furtherance of today's mediator announcement, the Official Committee of Retirees of the City of Detroit, the Detroit Retired City Employees Association, the Retired Detroit Police and Fire Fighters Association, and AFSCME Sub-Chapter 98, City of Detroit Retirees (collectively, the "Plaintiffs"), and the City of Detroit and City of Detroit Emergency Manager, confirm that they reached an agreement in principle on the terms that will resolve a lawsuit in federal Bankruptcy Court brought by the Plaintiffs with respect to the City's retiree health benefits program for the period of March 1 to December 31, 2014. The agreement must be reduced to writing and approved by the respective clients. Once executed, the lawsuit will be dismissed. The agreement resolves disputes concerning the scope of retiree health benefits for the period of March 1, 2014 through December 31, 2014, but does not address retiree health or other retiree welfare benefits in other periods. Under the Agreement, the City will provide benefits in addition to the benefits announced in booklets that were sent in early January to retired City workers. The agreement must still be finalized in writing and approved by all parties. Once it is finalized, the lawsuit will be dismissed by the Plaintiffs. Once the settlement agreement is signed, retirees will receive a detailed written description of these new benefits as soon as feasible. ALL MEDICARE ELIGIBLE RETIREES SHOULD BE AWARE THAT THE CITY WILL BE EXTENDING THE DEADLINE FOR MEDICARE ELIGIBLE RETIREES CURRENTLY IN A CITY-SPONSORED MEDICARE ADVANTAGE PLAN TO OPT OUT OF SUCH PLAN. MEDICARE ELIGIBLE RETIREES CURRENTLY RECEIVING BENEFITS UNDER A CITY-SPONSORED MEDICARE ADVANTAGE PLAN AND WHO OTHERWISE HAD UNTIL JANUARY 27TH TO OPT OUT -- WILL NOW HAVE UNTIL FEBRUARY 7, 2014 TO OPT OUT OF THE CITY-SPONSORED MEDICARE ADVANTAGE PLANS. IN ORDER TO OPT OUT, A MEDICARE ELIGIBLE RETIREE SHOULD TELEPHONE THE BENEFITS ADMINISTRATION CALL CENTER, AT 1-855-224-6200 , OR SEND A LETTER POST-MARKED ON OR PRIOR TO FEBRUARY 7, 2014 TO THE CITYS BENEFITS ADMINISTRATION OFFICE, 2 WOODWARD AVENUE, SUITE 1026, DETROIT, MI 48226. In brief summary, the additional benefits include: 1. An increase in the Citys monthly stipend from $125 to $300 for each retiree over the age of 65 who generally is not eligible for Medicare. 2. A monthly stipend of $125 for a retirees spouse who is not Medicare eligible, if such spouse acquires health insurance coverage under the Exchanges created by the Affordable Care Act, and the retirees annual household income is less than $75,000. 3. An increase in the Citys monthly stipend from $125 to $175 for each retiree under the age of 65, if

such retiree acquires health insurance coverage under the Exchanges created by the Affordable Care Act, and the retirees annual household income is less than $75,000. 4. A new City-sponsored healthcare plan option that will be offered to retirees not eligible for Medicare: retirees enrolling in such option will be required to pay the full cost of the premium for such option and administrative fees, less a $100 per month contribution to be made by the City toward the cost of such coverage. 5. The City will pay certain amounts for certain retirees with household income near or below the federal poverty line who may nonetheless not be eligible for Medicaid. 6. The City will reimburse Medicare eligible retirees who are enrolled in one of the City-sponsored Medicare Advantage Plans for certain catastrophic out-of-pocket drug costs. 7. The City will sponsor health reimbursement accounts and provide a $115 monthly contribution for Medicare eligible retirees who opt out of Medicare coverage under the City-sponsored Medicare Advantage Plans. It should be noted that several benefits will not be implemented until at least May 2014, although certain cash payment benefits will be retroactive to March 1, 2014.