[credit provider=”Wikimedia Commons” url=”http://en.wikipedia.org/wiki/File:Pittsburgh_dawn_city_pano.jpg”]
Pennsylvania’s municipal retirement agency has warned Pittsburgh to prepare for a state takeover of the city’s troubled pension funds, the Pittsburgh Tribune-Review reports.Pittsburgh faces unfunded pension liabilities of more than $700 million. Its three public pension funds are dangerously underfunded at an average 29.5%, one of the lowest “full-funding” percentages in the country.
The skyrocketing pension costs are threatening to crush the Steel City, which has one of the highest concentrations of older people in the United States. Half of Pittsburgh’s taxpayer revenue goes to cover pensions and health-care costs for city workers, as well as municipal debt.
A state pension takeover would require Pittsburgh to double its annual pension contributions, and would likely lead to layoffs and major cuts to services. The city has resisted the state’s advances for several years, but a 2009 law required the city to come up with a plan to ensure its pensions were at least 50% funded by September 2011.
The city council voted to raise parking fees and put the money toward its unfunded obligations. It is unclear, however, if the measure will bring the pension plans to sufficient funding levels, the Tribune-Review reports. Pennsylvania officials are now urging the city to turn over financial information on the pensions this week to ease the transition in the increasingly likely event that the state decides to step in.