Pittsburgh's long-troubled pension fund dwindled by $55 million during the first half of this year, thanks to high pay-outs and troubled financial markets.

Mercer Investment Consulting, the city's pension advisor picked late last year, reported today that as of mid-year, the fund held only $330 million, or less than 37 percent of the $899 million it should ideally contain. At the beginning of the year, it held $385 million.

"Considering where we're at in the global economy, I think we've all struggled, our pension fund included," said Mayor Luke Ravenstahl, who attended the fund board's meeting. "I don't know that the market will ensure success or failure" of the fund, he added, noting that "a great performance still isn't going to get us out of our problem."

In the first half of the year, the fund paid $42 million to retirees, while employee contributions amounted to just $6 million. Investment losses, which roughly mirrored the financial markets' struggles, made up the rest of the decline.

"It concerns us," said Finance Director Scott Kunka. "We've been treading water." The pension problem "took many years to build, and it will take some effort and time to get out of this."

Some help is on the way for the beleaguered fund. The city has yet to make its $38 million payment into the fund, which is usually made in October but may come earlier this year. In October, an anticipated $15 million state payment also should help shore up the fund.

Still, Mr. Ravenstahl said a statewide solution to municipal pension funding woes is needed, and he hopes to rally other mayors to a consensus plan by year's end.

More details in tomorrow's Pittsburgh Post-Gazette.