City's pension deficit worst in new study
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The city of Pittsburgh's troubled pension account is the worst-funded of 10 reviewed by The Pew Charitable Trusts in a report issued today.
The report -- called "Quiet no more: Philadelphia confronts the cost of employee benefits" -- looks primarily at the challenges facing that city, which had slightly less than half of the money needed to pay benefits due to retirees and current employees.
It included Pittsburgh among nine comparable cities, along with Atlanta, Baltimore, Boston, Detroit, Chicago, Denver, Phoenix and San Francisco. The other eight had more than half of the ideal level of pension money available, ranging from fully funded Detroit and San Francisco to half-funded Atlanta.
Pittsburgh, at last count, had $251.5 million, or just 28 percent of the $899 million needed, making it far and away the most distressed pension fund studied.
"The challenge is pretty daunting," said Larry Eichel, a project director with the Pew Charitable Trusts. Cities like Pittsburgh "are looking at payment schedules [to replenish pension funds] that are going to pose the question of whether they will limit the ability of cities to pay for core functions."
Pittsburgh Mayor Luke Ravenstahl has proposed the long-term lease of the city's parking garages to raise hundreds of millions of dollars to bolster the pension fund. The pension problem is at the center of the debate over a new recovery plan under state Act 47 for distressed municipalities, which could demand tax increases or spending cuts to shore up the fund, and comes up for a city council vote tomorrow.
The Pew report discussed an emerging state solution that would include a takeover of some 75 municipal pension plans that contain less than half the money they should, including both Pittsburgh's and Philadelphia's. James L. McAneny, executive director of the state's Public Employees Retirement Commission, said today that the plan's details are still being negotiated, and it could be introduced in the General Assembly next week.
The state plan "would undoubtedly help in the long term, but the long term is a long way away," said Mr. Eichel.
The poor showing of Pittsburgh's pension fund contrasts with its top ranking in a Pew report on budget deficits released last month. In that report, Pittsburgh was the only one of 13 cities reviewed that was posting budget surpluses.
First Published June 29, 2009 12:45 pm
