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Big Cities, Big Pension Problems

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In 2009 we wrote a full length report on the condition of pensions in the state’s ten largest cities.  At the end of that year the state passed Act 44 which dealt with municipal pensions.  As evidenced by yesterday’s blog there is still alot of work to be done and there is an effort to make sure that municipal pensions are not forgotten in the search for solutions to the statewide pension problem.

A recent article looked at big city pensions by presenting data on active workers, retired workers receiving pensions, and the funded ratio (assets/liabilities) for the same ten big cities.  The article noted that nine of the state’s ten largest cities have more pensioners than active workers (only Lancaster had a ratio of less than one).

So how do things compare from our 2009 report (which reported 2007 PERC data) to the recent article (which uses 2013 PERC data)?

  • In 2007, four cities had a ratio of greater than 1 on active to retired workers, now nice cities do.
  • In 2007, three cities had a funding ratio of 60% or less.  In 2013 four cities did (Allentown at 60%, joining Philadelphia, Pittsburgh, and Scranton)
  • Only Pittsburgh had a decrease in its active-retired worker ratio, falling from 1.37 to 1.28.  It had essentially the same number of active workers but the number of retired workers fell by 6%.
  • Four cities (Reading, Bethlehem, Scranton, and Harrisburg) had a double digit drop in the number of active workers from 2007 to 2013.  Four cities (Reading, Bethlehem, Lancaster, and Allentown) had a double digit hike in the number of retired workers over those years.
  • Only Pittsburgh saw its funding ratio increase (16%) and the ten cities are divide in half with five cities having a funded ratio 70% or greater and five cities 69% or below.
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Allegheny Institute
Allegheny Institute

The Allegheny Institute is a non-profit research and education organization. Our mission is to defend the interests of taxpayers, citizens and businesses against an increasingly burdensome and intrusive government.

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