The market woes that are shrinking retirement plans have started pounding municipal pension funds, especially the city of Pittsburgh's draining pool of investments.

At the end of November, the city's fund held $261 million, down from $385 million at the beginning of the year, with half of that loss occurring in the last two months. That leaves the fund with just 29 percent of what it should ideally hold to cover its long-term commitments, according to state standards.

"It's not good. But we're trying to control what we can, and then ultimately will need help from our friends in Harrisburg," said Mayor Luke Ravenstahl, after a pension fund board meeting yesterday.

The fund's eight-member board voted to change its investment assumptions, offer non-pension options to new workers and dismiss some fund managers. Mr. Ravenstahl also sent a letter to state legislators touting a four-point statewide municipal pension fix, freshly endorsed by the Pennsylvania League of Cities and Municipalities.

The city pension fund's investments had to earn 10 percent to keep pace with $6.7 million a month in pension payouts. Instead, they lost 25 percent.

The city's pension advisers from Atlanta-based Mercer Investment Consulting said that loss was slightly better than the average of similar funds, and the result of "unprecedented times" that may not end anytime soon.

Can the fund survive another bad year?

"It's hard to say in terms of what the future holds," said Mr. Ravenstahl. "We're kind of all holding our breath and crossing our fingers that this downturn in the economy changes as quickly as it possibly can."

So are suburban leaders whose funds took hits during the first three quarters of the year, though their situations aren't as dire.

South Fayette Manager Mike Hoy said the township's pension fund had dropped from $5.4 million at the beginning of the year to $4.3 million now, a 20 percent loss. He said unless the market recovers, the township's required payment into its pension fund is going to "skyrocket."

North Fayette was faring a little better, with a loss of about 15 percent -- a drop from $6.3 million to $5.3 million. "It's a scary thought because we know we're going to have a big pension payment down the road," said Manager Bob Grimm.

Mr. Grimm said it is small comfort that North Fayette's plan had outperformed most benchmarks. "It isn't a real comfortable situation for any of us," he said, "and it doesn't really help knowing that everyone else is in the same situation."

Wilkins manager Rebecca Bradley said the township's pension fund went from $3.7 million at the end of last year to $2.9 million on Sept. 30. "This is just as of September. Look at where [the markets] have gone from there," she said.

Monroeville Manager Marshall Bond said the municipality's police pension fund lost about 16 percent of its value in the first three quarters of the year. It stood at $25.9 million at the beginning of the year and fell to $22.2 million.

Penn Hills Manager Terry Van Horne said the non-uniform employee pension fund lost 18 to 20 percent of its value since January, and the police pension fund lost about 11 percent of its value.

Cranberry's pension investments have declined just about in line with the overall bear market, Manager Jerry Andree said. He estimated that the two pension funds, which now total about $6 million, have dropped 12 to 14 percent.

"We have no changes planned," he said. "We feel our investment policy is correct and we are staying the course."

The township's police pension fund, which offers guaranteed benefits based on salary and years of service, was 95 percent funded before the recent downturn in the stock market, Mr. Andree said. Non-uniformed employees have a defined contribution plan, where their pensions will depend on investment results.

Dennis Pittman, McKeesport's finance director, said he'd "be a fool to say that I'm not dramatically nervous."

Though he did not have concrete numbers, he estimates McKeesport's aggregated pension fund -- which includes the funds for police, fire and non-uniformed employees -- has decreased around 40 percent since the beginning of this year. At the end of August, he said it was at about $27 million.

In the 2009 fiscal year, the city will be legally required to contribute about $300,000 more than it did this year, which was around $690,000.

"If we're going to pay it ... something else has to give," he said.

In Murrysville, the pension fund took a $1.6 million hit, bringing it down to about $8 million. It's underfunded by about 20 percent, said chief administrator John Barrett.

The municipality has allocated about $180,000 above what it's legally obligated to pay into the fund to get the pension fully funded in the next decade. The municipality currently pays around $670,00 a year.

Mr. Ravenstahl led the city's pension fund board in voting to offer a defined contribution plan to new, non-union employees. It also voted to reduce the number of investment fund managers handling its money from 15 to 13, but that won't come close to filling the city's funding gap.

The mayor wants the state to change the formula for distributing state aid to municipalities, create incentives for pension pools to merge, help local governments to create non-pension retirement plans, and outlaw the practice of artificially depressing municipal pension pools to attract state aid.

The city has traditionally made only the state-mandated minimum contribution to its fund each year, except during the late 1990s when it borrowed hundreds of millions of dollars to shore it up. Now the city will change its calculations to put $6 million to $8 million more into the fund than previously planned,

Payments into the fund already eat up 11 percent of city revenues, but Mr. Ravenstahl said the budget would be able to absorb the additional cost.

Councilman Patrick Dowd, who attended the pension meeting, said council would debate whether to shift even more money into the fund during its budget discussions this month.