Ravenstahl says he would veto Peduto's early-pension incentive for Pittsburgh employees

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Pittsburgh Mayor Luke Ravenstahl, who leaves office in a little more than a month, said Thursday he will veto his successor Bill Peduto's proposal for early retirement buyouts for some longtime city employees.

At a meeting of the Comprehensive Municipal Trust Fund Board, Mr. Ravenstahl panned Mr. Peduto's legislation, calling it financially imprudent and saying it could force the incoming administration to pay $5 million to $10 million more into its pension fund. After the meeting, he went further, calling the plan "awful."

"I think it's awful and really flies in the face of everything my administration has done financially," he said. "I don't know why taxpayers should be paying them to have a soft landing."

Kevin Acklin, Mr. Peduto's future chief of staff, accused Mr. Ravenstahl of turning the early retirement plan into a "political football," pointing out that the program was crafted with help and input from members of his administration. The proposal, Mr. Acklin has said, will cost the city nothing because Mr. Peduto plans to eliminate about a third of the jobs that early retirees leave.

"This proposal would help many people who Mayor Ravenstahl has hired and promoted over the past seven years and was a good-faith effort by Mayor-elect Peduto and the new administration to help with a smooth transition," he wrote. "We simply will not tolerate games being played with the lives of city workers."

In mid-November, about a week after he clinched victory in the November general election, Mr. Peduto proposed a program that would allow 136 non-union employees to retire early, many who are in supervisory roles that Mr. Peduto hopes to fill through national searches. Those whose combined age and years of service is 70 would be able to retire with a full pension, shaving 10 years off current pension requirements.

Although the early retirement plan was approved by council in a preliminary vote, it has raised concerns among state overseers. Nick Varischetti, chairman of the Intergovernmental Cooperation Authority, has said he believes it violates the recovery plan meant to help the city shed its status as a financially distressed municipality. The plan was held for a public hearing by council on Tuesday, which means a final vote won't be taken on it for at least two weeks.

In another move, the mayor backed a proposal by Controller Michael Lamb to lower the pension fund's expected rate of return from 8 percent to 7.5 percent, which signals that the city expects to make less from investments. Under funding formulas, it would mean an increase in the state-mandated contribution to the pension -- up to $10 million more. The city already contributes above what the state mandates.

Mr. Ravenstahl said he supported the measure because he wanted to protect the progress his administration has made in funding the pension.

"Who knows what this future administration will do?" he said.

Mr. Peduto supports lowering the expected rate of return, but as part of a comprehensive set of reforms that would generate more revenues for the city, Mr. Acklin said.

Moriah Balingit: mbalingit@post-gazette.com, 412-263-2533 or on Twitter @MoriahBee.

Moriah Balingit: mbalingit@post-gazette.com, 412-263-2533 or on Twitter @MoriahBee. First Published December 5, 2013 3:19 PM

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