Pennsylvania Auditor General Eugene A. DePasquale said the city's pension fund is sliding "toward distress."
By Adam Smeltz / Pittsburgh Post-Gazette
Funding levels for Pittsburgh’s city worker pensions dipped to 57 percent in 2015, down from 58 percent in 2013, state Auditor General Eugene DePasquale said Wednesday.
The slippage materialized even though the city paid $41.3 million more than required for that period, said Mr. DePasquale, who released a 35-page audit report. He said the dip illustrates again that state officials should intervene in “the growing statewide municipal pension crisis.”
“This just highlights that the city alone cannot fix it on its own,” Mr. DePasquale said. He said about 25 percent of municipal pension plans in Pennsylvania are in some level of distress, meaning their funding levels are less than 70 percent of their obligations.
A pension plan is considered “severely distressed” if funding levels slide below 50 percent, according to Mr. DePasquale’s office.
In Pittsburgh’s case, he said, the city is falling behind because of demographic changes over the last 30 to 40 years. The city population has tumbled by more than a quarter since 1980, chipping away at the tax base.
By January 2015, the city counted 4,209 pension retirees and 3,161 active employees, Mr. DePasquale’s office said. The total pension liabilities reached $1.2 billion that year, up $45.5 million from 2013 due largely to benefit payments for more retirees, according to the office. Pension assets climbed from $675 million to $688 million.
“We welcome the findings as well as Auditor General DePasquale’s calls — which we share — for municipal pension reform,” said Timothy McNulty, a spokesman for Pittsburgh Mayor Bill Peduto, in a statement.
A city pension board last month adjusted the rate of return, requiring an estimated $4 million in additional payments for the pension fund each year, Mr. McNulty said. City budget plans call for allocating an extra $203 million — above and beyond state-mandated minimums — over five years.
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