City leaders in Pittsburgh are trying to win approval of a plan to bolster their severely underfunded pension fund in order to avoid a takeover of the fund by the state. The Pittsburgh pension system is one of the worst-funded municipal pension systems in the country, with unfunded liabilities reaching as high as 70 percent within the last year. The state of Pennsylvania ordered the city to come up with a plan to bolster the fund's assets to at least 50 percent of liabilities by Sept. 1 or face a takeover, but city officials have been squabbling over a plan.
Mayor Luke Ravenstahl has favored leasing the city's municipal parking garages and meters in order to raise money to place into the pension fund, but the city council has instead argued for a plan that devotes revenues from those sources directly to the fund, but leaves the management of the assets in city hands. Just last week the city's pension board agreed to back the council plan and to declare that the present value of the city's parking revenue for the next 31 years, amounting to estimated $239 million, when combined with the fund's current assets would put the pension system above 50 percent funding. By opting for the city council plan, however, Pittsburgh is also taking on the risk that the meters and garages don't generate the anticipated revenues, which the city would then have to make up for from other sources.
In any case, Pittsburgh's desperate search for revenues to shore up its pension system is already biting into the local economy. The city has extended hours of enforcement for its meters and limited their use to one-hour at a time by a customer, which has sparked complaints from downtown merchants that the new rules are impractical and will drive away business. "I've had people walk into my restaurant and say, 'I'm never coming down here again,' " the owner of one restaurant, Primanti, told the Post-Gazette.
The city is seeking to avoid a state takeover out of fears that the state would hit Pittsburgh with big future assessments in order to bring the pension system up to an adequate funding level.
The state still has to approve the Pittsburgh plan.
In any case, Pittsburgh's desperate search for revenues to shore up its pension system is already biting into the local economy. The city has extended hours of enforcement for its meters and limited their use to one-hour at a time by a customer, which has sparked complaints from downtown merchants that the new rules are impractical and will drive away business. "I've had people walk into my restaurant and say, 'I'm never coming down here again,' " the owner of one restaurant, Primanti, told the Post-Gazette.
The city is seeking to avoid a state takeover out of fears that the state would hit Pittsburgh with big future assessments in order to bring the pension system up to an adequate funding level.
The state still has to approve the Pittsburgh plan.
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