If you live or work in the city of Pittsburgh, a growing share of the taxes you pay is going toward pensions for police, firefighters and other municipal workers.

That's because the city hasn't socked away enough money to pay its future pension obligations. It's $469 million short, a worsening fiscal problem that Mayor Bob O'Connor's administration is planning to address this week.

Yesterday, the administration said it was naming City Council President Luke Ravenstahl to the board that controls pension investments. The Comprehensive Pension Fund board, which also includes the mayor, city solicitor and three employee representatives, is set to meet Thursday for the first time this year.

The administration is also crafting pension funding reform plans to take to Harrisburg. The city's state-appointed overseers are studying whether city employees are paying too little into the pension fund, or getting too much out.

Pension costs are "consuming more and more of our operating budget," said city Budget Director Scott Kunka. "This is the next big fiscal issue."

Municipalities are supposed to have enough money socked away to cover the anticipated pension payouts to retirees and to current employees once they retire.

Some, like Mt. Lebanon and Bethel Park, met that target as of 2003, when the state last evaluated each municipality's pension health. McKeesport had 80 percent of what it should, and Penn Hills, 73 percent.

Even fiscally troubled Philadelphia had set aside 63 percent of what it expects to pay out to retirees and current employees.

Last year, Pittsburgh had just $374 million in its pension fund, or 44 percent of the $843 million it should have. That's down from 76 percent in 2000, when its stock investments were flying high, but up slightly from 2003.

State law requires that the city make progress toward 100 percent funding.

"Any time you get below 50 percent, you have serious issues," said Anthony Salamone, executive director of the state Public Employee Retirement Commission, which oversees municipal pension funds.

Those issues could blossom into a crisis if city pension fund investments in the stock market tanked. And if the city ever went bankrupt, it could mean pensioners would get a fraction of what they're owed.

"I just hope they get it going and get more money in it for us," said William Lardo, 62, of Bloomfield. He retired last month from the Public Works Department, getting pension payouts of $1,570 a month for life, after contributing $35,000 to the fund over 28 years.

The city has five options:increase employee contributions to the fund; cut benefits; shovel more money in; improve investment performance; and seek more state aid.

The state-appointed Intergovernmental Cooperation Authority, or ICA, wants the city to pursue all five. Mr. O'Connor's administration is focusing on the last two.

The ICA has asked the city to make more than the minimum required contribution to the pension fund, much as a homeowner makes extra mortgage payments to save money in the long run. Mr. Kunka said the city can't afford that right now.

ICA Executive Director Henry Sciortino said his agency is studying how much employees pay into the fund, what they get back and when they're eligible to get it.

Police and firefighters pay 6 percent of their salaries into the pension fund. Other employees pay 4 percent or 5 percent, depending on when they were hired. They become eligible to collect at various ages after 20 years of service, and get different percentages of their top salaries.

Changes in those terms could rile politically potent city workers. Some are, in fact, demanding better pension benefits. Last week, the board that awards pensions to city workers other than police and firefighters asked the administration to study the cost of enhancing their pensions.

Mr. O'Connor is turning to the state.

Just two years ago, state aid and employee contributions covered almost all of the city's obligation to its retirees. This year, though, the city expects to have to use $15.5 million in tax dollars to meet its minimum required contribution to the pension fund.

That's due in part to a state aid formula that punishes the city for cutting jobs.

The state gives municipalities up to $6,000 in pension aid for each active police officer and firefighter, and $3,000 for other employees. There's no consideration of the number of retirees.

As the city shed around one-third of its work force, its state pension check slid to an estimated $16 million this year, from $28.4 million in 1989.

"We were fiscally responsible by reducing the amount of employees," said Mr. Kunka. "But it is reducing our state aid."

At the same time, cost-cutting has driven employees into retirement, boosting the amount the fund pays out to around $66 million, up from $36 million in 1989.

State Sen. Jay Costa, D-Forest Hills, a member of the state Public Employees Retirement Commission board, said he'd like to change the rules to protect Pittsburgh from losing pension aid when it cuts employees.

The O'Connor administration wants the state to tighten eligibility for pension aid, so well-off municipalities can't tap into the limited pool of funds.

Currently, nearly every municipality qualifies for state pension aid. Mr. Salamone said some get their entire annual pension payouts reimbursed by the state.

Some states include all municipal and state employees in a single pension fund. Pittsburgh officials have long talked about rolling the city's pensions into the state's flush pension fund, but that could be politically difficult.

For now, the city is on its own.

It counts on its pension investments bringing in hefty 8.75 percent returns per year, a target it sometimes makes, sometimes misses.

"We're going to look at our investment performance and our investment manager," said Mr. Kunka. He said that investment manager, Hirtle, Callaghan & Co., of suburban Philadelphia, is on a month-to-month contract.

The city has to do something, said Mr. Sciortino, noting that pension obligations continue to grow.

"At some point," he said, "it's impossible to catch up."