Eliminating overtime in pension calculations, moving new hires into “cost contained” plans, reforming the way state pension aid is distributed, reducing overhead for 3,000 separate plans: those were just a few of the suggested reforms for municipal pensions made by the Mayor of Pittsburgh to a state legislative committee. What’s important to note was that not only were those recommendations made yesterday, they were essentially made by the previous Mayor in 2008.
Of course, alot has changed since 2008 insofar as municipal pensions in PA are concerned: the state passed Act 44 of 2009, the City flirted with a plan to sell parking garages and opted instead for a long-term infusion of value, and Pittsburgh moved from “severely distressed” to “moderately distressed”. But there is still more to be done for municipal pensions, all the while the state still has not decided to do with state worker and teacher pensions.
Much news coverage was given to the distribution of state pension aid (here and here), a topic we wrote about in 2008, and raising the retirement age and years of service for normal (unreduced) retirement. While much was covered on the state aid and how it funds Pittsburgh and the Allegheny County suburb of Upper St. Clair, it is worth taking a look at those two communities on qualifications for normal retirement and plan type.
In Pittsburgh, police, fire, and non-uniformed workers are under defined benefit plans. In Upper St. Clair police and public works employees are under defined benefit plans, all other employees are in a defined contribution plan. A police officer in Pittsburgh can receive normal retirement benefits at the later of age 50 or 20 years of service. A police officer in Upper St. Clair can receive normal retirement benefits at age 54 and 25 years of service. That means an officer hired at age 25 would end up working 25 years in Pittsburgh but 29 years in Upper St. Clair. A public works employee hired at the same 25 years of age in either municipality would essentially be treated the same–in Pittsburgh, normal retirement is achieved at the later of age 60 or 8 years of service, while in Upper St. Clair it is age 60 and 10 years of service.
What would the Mayor want to see in Pittsburgh? An age requirement was last added for firefighters hired after 1976 (prior to that it was 20 years of service, now it is the later of age 50 or 20 years of service). Would it be 55 years of age and 20 years of service? 50 and 25 years of service? Would it be age or length of service or both?
