The city of Detroit and its police officers have signed a landmark agreement that may be used a model for other cities nationwide. The city persuaded officers to accept reduced pension benefits that will result in a huge savings for the city.

“This is a historic agreement for the city and the DPOA,” said Mayor Dave Bing in a statement. “It shows that we are executing our plan to return the city to fiscal stability by reducing pension costs and doing so through hard work and tough negotiations.”

According to the Detroit News:

The contract freezes wages, reduces the multiplier used to calculate pensions from 2.5 to 2.1 percent, eliminates cost-of-living benefit increases and switches officers hired after July 1, 2012, to a defined contribution plan, similar to a 401(k). The deal maintains longevity pay and health insurance premiums and allows police brass to reassign officers from 36th District Court and replace them with civilian workers. It also will add a 13th member to the Police and Fire Pension Board to assure against tie votes.

The two sides will be back at the bargaining table in less than a year.