If the state takes over the Pittsburgh pension fund, the city will be forced to pay about $3.6 billion over the next 30 years to ensure the fund's solvency, the state's actuary told City Council today.
The process would mean steeply higher annual pension payments, beginning in 2013, Ken Kent, actuary for the Pennsylvania Municipal Retirement System, said.
The city's required pension payment is $45 million this year, though the city voluntarily intends to kick in an additional $11 million or so.
Under a takeover, the city's payment would climb to $86.3 million in 2013 and peak at $160 million in 2032, according to Mr. Kent's report.
The presentation comes as council continues to wrestle with the best way to help the pension fund.
City officials have said the fund is 27.5 percent funded. Mr. Kent's report said the fund on Jan. 1 likely will be 24.6 percent funded, with unfunded liabilities of $691.7 million.
Councilman Ricky Burgess said the numbers are frightening and warrant renewed consideration of parlaying parking lease revenue into a pension fund bailout.
Last month, council voted down Mayor Luke Ravenstahl's proposal to lease parking assets for 50 years and use at least $220 million of lease proceeds to boost the pension fund and avert a takeover.
The fund must be 50 percent funded by Dec. 31 to avoid a state takeover. The mayor's plan would get the fund 50 percent funded, but it wouldn't chart a course for getting the fund 100 percent funded.
Mr. Burgess and two colleagues, R. Daniel Lavelle and Theresa Kail-Smith, today introduced legislation to revive a parking lease proposal. But they envision changes, such as a term of less than 50 years, to win the support of council members who voted against the plan last month.
Mr. Burgess called the takeover payments a time bomb that could send the city into insolvency.
"We're talking about the life and death of the city," he said.
Mr. Ravenstahl has warned for months that a takeover would mean skyrocketing pension payments, leading to tax hikes and tax cuts. Mayoral spokeswoman Joanna Doven today said the numbers provided by the state mean the situation is more dire than the mayor feared.
Mr. Burgess said a parking lease is the only way to avoid a takeover, but other council members are looking for other options.
Councilman Patrick Dowd is part of a council majority that wants the city to sell its share of parking assets to the parking authority for $220 million -- money that would be pumped into the pension fund to avoid a takeover. Like the mayor's plan, the council-backed alternative wouldn't chart a course to get the pension fund 100 percent funded.
Joe Smydo: email@example.com or 412-263-1548.