Pittsburgh’s pension plans are “severely underfunded” and the city’s plans to save them may not be enough to avoid a state takeover, according to Pennsylvania’s state auditor.
In an audit released yesterday, state auditor Jack Wagner urged the city to take bigger steps to shore up its three public pension funds, which have a combined unfunded liability of nearly $1 billion.
At about 30% funding levels, Pittsburgh’s three pension systems are some of the worst in the state. The pensions must be at least 50% funded by this fall to avoid a state takeover.
A plan to raise parking fees and put the money towards the city’s pension debt doesn’t go far enough, Wagner said Tuesday, putting it in terms that would resonate with the Steel City.
“I would equate that to the Steelers getting the ball on the 34-yard line after a kickoff, and advancing it to the 50-yard line, and not going all the way for the touchdown,” he said.
As we have pointed out, Pittsburgh is being crushed by skyrocketing retiree pension and benefit costs. The city has resisted a state takeover for several years but a 2009 law says the pensions must be at least halfway funded by September 2011.
The state would likely require the city to double its annual pension contributions to more than $100 million. The added strain would lead to layoffs, sharp budget cuts and a potential credit downgrade, pushing Pittsburgh even deeper into its financial doldrums.