Pension solution for city remains elusive
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The city of Pittsburgh spends nearly $3 million a year managing its pension benefits and investing its retirement pool -- a figure that has remained steady even as Mayor Luke Ravenstahl's administration has pursued a slew of so-far-failed plans to plug a huge funding gap.
Some of the spending is outside the administration's control, governed instead by panels of police and firefighters who have given veterans of their ranks well-paid posts administering retirement benefits.
Firefighters Local 1 President Joseph King, for instance, gets $37,192 a year to serve as secretary-treasurer of the Firemen's Pension Fund, in addition to his $68,718 earnings as a master firefighter for the city, plus $7,500 for union work -- a total of $113,410.
Mike Kroner, a retired city police sergeant and son of former Allegheny County Police superintendent Robert G. Kroner, collects a pension check and also earns $64,012 as the Police Retirement Fund secretary-treasurer, plus $2,300 for expenses.
PG chartsEach man has two clerks and a rising budget. A separate Municipal Pension Fund has three employees, and there are three outside lawyers involved in pension work -- which adds up to a problem, some officials said.
"The city's [pension] situation is so serious that every effort to contain costs has to be looked at," said city Controller Michael Lamb. "We've got to have more consolidation of those staffs."
The city's $3 million-a-year bill for pension administration is split between investment expenses that have averaged $1.8 million a year, and administration costs that have averaged $1.3 million.
"It sounds a little high," said council President Darlene Harris.
The city's pension funds contain "hundreds of millions of dollars," said Mr. Kroner. "A million dollars [for administration] isn't very much when you're looking at numbers like that."
The city's pension fund late last year held less than one-third of the nearly $1 billion it should have to cover obligations to retirees and current employees. On Thursday, the city's Comprehensive Municipal Pension Trust Fund board, which oversees city retirement investments, met but did not release a year-end balance for the fund, for fear that any figures released might be used to justify a state takeover of the city's pensions.
First Published February 13, 2011 12:00 am
