Pittsburgh avoids state takeover of pensions

PITTSBURGH

Pittsburgh officials have averted a state takeover of the city pension fund.

The Public Employee Retirement Commission on Monday approved a plan formulated by city council late last year that is designed to increase funding of the pension above a 50 percent threshold required by state law.

Under the plan, the city will allocate $735 million in parking taxes from its general fund over a 30-year period to raise the value of the pension from an estimated $393 million to about $632 million. State law requires the city to cover at least half of its estimated $1 billion in obligations to about 7,000 employees and retirees.

The state, after requiring additional documentation from the city in recent days, ruled Monday that the revenue pledge was sufficient.

Council and Mayor Luke Ravenstahl disagreed last year on how to boost the pension fund but agreed that a takeover would be disastrous. Ravenstahl warned that the state would require drastically higher payments that the city could make only with tax increases, service cuts or both.

"This is extremely good news for the people of Pittsburgh," Ravenstahl said. "We worked very hard to make sure that the city's plan would be accepted by our accountants, actuaries, and ultimately the commonwealth."