Pittsburgh’s Pension Woes Call for a Hail Mary
February 5 | Posted by mrossol | Liberal Press, SocialismPittsburgh’s Pension Woes Call for a Hail Mary – WSJ.com.
Citizens, hold on to your wallets… we could blame the politicians, but … we elect them. Duh?
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… By relying on outdated actuarial tables, making only minimum payments, and failing to limit benefits as the number of active workers paying into the plans fell, Pittsburgh has accumulated a $700 million unfunded liability, and its 29.5% funding level is among the lowest in the U.S.
Officials narrowly met an end-of-year deadline set by the state to present a plan for reaching a 50% funding level, which they hope will avert a possible state takeover of its three pension plans for city workers. . . .
Pittsburgh already devotes half of taxpayer dollars to debt, pensions and health-care costs for city workers. Under state oversight, that would rise to 70%, requiring large across-the-board cuts to public safety and other employees, and cuts to services in a city that already struggles to maintain its aging bridges and roads.
Pittsburgh continued using 1984 life-expectancy tables until at least 2003, failing to reflect gains in longevity. As the pool of retirees lived longer, their payouts were larger than the accounting anticipated, and annual contributions didn’t keep up.
“Previous administrations have kind of avoided this issue and put it off. It’s not easy to deal with and not politically popular,” Mr. Ravenstahl said.
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