City Pension Reform, 1996-2009

 

Year

Report/Event

Funded Ratio

Recommendations

1996

Competitive Pittsburgh

18%

Pension Bonds, Use Savings from Bond Sale or Debt Restructuring to Reduce Obligations

2000

Pgh21

60%

Seek additional state aid, Establish defined contribution plan for new employees

2004

Initial Act 47 Plan

41%

Make pension payments at beginning of year, ask state to amortize liabilities, re-evaluate pension contribution levels

2004

Mayor’s First Financial Forecast

41%

Close loophole on state pension aid, hold harmless for workforce reductions

2008

Mayor’s Testimony to Senate Urban Affairs and Finance Committees

42%

Revise state aid, prevent spiking, permit defined contribution plans, consolidation of plans into a statewide system

2009

Amended Act 47 Plan

29%

Contribute $10-14 million more per year to pensions, evaluate pension bond funding, no pension enhancements, explore a new, lower cost defined benefit plan for new hires

2009

Mayor’s Plan and Act 44 Provisions

29%

Sell or lease all Parking Authority garages, lots, and meters and put proceeds into pension fund, Higher ed tax, freeze of parking tax at 37.5% with 6.75% used for MMO, permit an additional 2.5% on parking if all garages are sold with 100% of that tax going to MMO

 

 

Will Legacy Costs Force Pittsburgh Into Chapter 9 Bankruptcy?

“…the notion that the second largest city of this Commonwealth would record the unprecedented status of bankruptcy is simply an unacceptable alternative”-

Report of the Intergovernmental Cooperation Authority, April 12, 2004

 

Five years ago when the City was new to Act 47 status and the oversight board was getting its bearings there had to be some inkling of a very real possibility Pittsburgh could find itself in front of a bankruptcy judge.  The City was characterized as being saddled with an outmoded tax structure and out of budgetary gimmicks to meet its spending needs.  Per capita debt was far out of line with other U.S. cities. To forestall a worsening situation, the state had approved the City’s petition for Act 47 status, created a new, separate oversight board, and enacted a tax reform package for the City.   

 

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Pittsburgh Encounters Pension Reform and Doesn’t Like It

If the health of Pittsburgh’s three pension plans doesn’t soon improve and if pending municipal pension reform legislation becomes state law, the City will see its oversight and administration of the plans transferred to the state and all future employees will become members of a new, uniform system of pension recipients.

 

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