|Untagged||24 Jun 2009|
|Lumping in Pensions by allegheny|
Obviously content with the progress in merging the City of Pittsburgh and Allegheny County, the Chief Executive (along with other county officials) convened a panel on local pensions yesterday that examined what should be done with the 3,100-plus plans that dot the Commonwealth. "Should there be a statewide municipal pension fund?" was one question the Executive asked.
The answer is "it depends". If the plan is to absolve local governments completely of there liabilities, it is unlikely to happen. Philadelphia alone accounts for nearly $4 billion in unfunded liabilities, the lion's share of the total local unfunded liability. If there is a voluntary movement to the existing PA Municipal Retirement System where there would be management of investments but local governments still make contributions, it would be possible but it would be a gradual process.
But it is not true that consolidation would allow municipalities to withstand market downturns or pressure from parties interested in increasing benefits as the Executive seemed to imply. Consider that the state's two statewide pension plans-SERS for state workers and PSERS for teachers-have been hammered by the downturn. And since these huge plans cover so many workers the impact of rate spikes are much more widespread. We already know that both systems are set for big jumps in the employer contribution rate due to promises made by the Legislature in the early part of the decade. School districts could see a tripling of their rates. One school official noted "even though we know we are coming up to a cliff, nobody's been willing to address that cliff ahead of time".
Strength in numbers? Maybe, maybe not.