State to Determine if Pittsburgh Pension is 50% Funded Today
A state agency will tell Pittsburgh leaders today whether the city's underfunded pension plan had the cash needed to avoid a state takeover on January 1, 2011.
On Friday, the Public Employee Retirement Commission received the last documents necessary from the city, concerning Pittsburgh's fund custodian, PNC Investment Group.
PERC Executive Director James McAneny said having reviewed that data, his group will tell the city the fate of its pension fund today, more than nine months after the takeover deadline. McAneny said the city's first actuarial evaluation of its pension fund, sent September 1, didn't meet the 50% funding minimum needed to avert a takeover by the Pennsylvania Municipal Retirement System. He said Pittsburgh's pension board had to send a revised evaluation last week, because the first one proved only that the fund met 39% of its obligation of nearly $1 billion.
Much of the uncertainty surrounding the pension's funding level has resulted from the question of whether a dedication of future revenue — in this case, from the city's parking assets — can count toward the pension fund's December 31, 2010 funding level.
On that day, Pittsburgh Council approved a last-minute deal to dedicate Pittsburgh Parking Authority revenues to the pension fund for 31 years. That plan emerged as a sort of compromise, after Mayor Luke Ravenstahl's summer 2010 plan to lease the city's parking assets was rejected by Council.
The state ordered in 2009 that Pittsburgh fund its pension plan to cover at least 50% of its obligation to retired city employees.
If the PERC decision is negative, the PMRS will assume control of the city's pension plan until it's no longer "distressed." If PERC agrees that the pension is indeed half-funded, the city will continue to control the fund.