Who Else is Severely Distressed?
Under Act 44 of 2009, which was referenced in yesterday’s blog as the major thrust of reform for local government pensions, local communities had their pension plans defined in terms of levels of distress depending upon how well (or how poorly) funded their plans are. A municipality whose plans (in aggregate) had a funded ratio of 90% or more are classified "not distressed"; 89-50% represents the middle ground and is split between "minimal" and "moderate" with the cutoff coming at 69%; the other end of the distress level, those at 49% or below, received the tag "severely distressed".
Pittsburgh, with a funded ratio of 34%, is firmly camped in the land of the "severely distressed" and Act 44 contains special provisions applying solely to it. In short, if it is determined the City’s funds are not at 50% funded or better the plans will be transferred to a state agency for administration and oversight.
The Public Employee Retirement Commission (PERC) has distress scores for roughly 1,440 municipalities at present (some still have not submitted valuations to PERC). Twenty-six, or 2% of all reported, are labeled "severely distressed". There are nineteen townships, three boroughs, two authorities, and two cities (Pittsburgh and Scranton). Twenty of the Commonwealth’s 67 counties are represented. The counties of Allegheny, Beaver, Lackawanna, and Susquehanna each have two local governments in the group.
Nine just fell under the 49% cutoff with funded ratios of 48 to 45%. The lowest funded ratio was 23%, a level shared by Braddock Hills (Allegheny) and Columbus Township (Warren). In total this group of twenty-six has $409 million in assets and $1,141 million in liabilities, resulting in an aggregate funded ratio of 36%. It is plain to see that Pittsburgh, with assets of $339 million and liabilities of $989 million, is the largest member of this group.