Office of Mayor William Peduto
Mayor William Peduto Calls for Statewide Municipal Pension Reform
Thanks Auditor General Eugene DePasquale for his leadership on pension issues

PITTSBURGH, PA (March 4, 2015) Mayor William Peduto today endorsed bipartisan efforts by mayors, legislators and business leaders statewide to approve legislation to address Pennsylvania’s growing municipal pension crisis.

The crisis is reflected in Pittsburgh’s own pension fund, which was the subject of an audit released today by state Auditor General Eugene DePasquale. Despite efforts to shore up the fund, increase funding for it out of the city’s operating budget, and an improving stock market, Pittsburgh’s overall funding ratio still dropped from 62 percent in 2011 to 58 percent in 2013.

Operating budget support for Pittsburgh’s fund had to rise from 11.3 percent of the city’s total spending in 2014 to 12.9 percent in 2015, which points to an unsustainable rate of long-term spending growth. Municipalities across the state are facing similar pension difficulties, and in his budget speech Tuesday Gov. Tom Wolf too mentioned the need to strengthen municipal pensions.

“We have done everything possible to fix our pension woes but they continue to mount. The system is simply broken,” Mayor Peduto said. “This is a fiscal crisis that may end in bankruptcies for some of Pennsylvania’s cities, and I join mayors all across the state desperate for a real solution.”

Mayor Peduto joined efforts by the Pennsylvania Municipal League and others to push for municipal pension reform, starting with discussions on upcoming House Bill 316. The bill contemplates:

  • All current employees being held harmless and retaining existing rights and benefits at current levels

  • For new hires only, adoption of a cash balance hybrid plan that includes aspects of  both a defined benefit and a defined contribution plan

  • Authorizing an optional 457 plan as an additional employee retirement tool

  • Requiring pensions to be calculated on base pay and a small percent of overtime, curbing pension “spiking”

  • Removing pension benefits from the collective bargaining process  

  • Establishing pension plan portability options for new hires

  • Improving job and pension security for uniformed unions

In addition Mayor Peduto is also pushing a solution that resets state distribution formulas for pension aid.

“We are at the beginning of long but vitally important discussions on municipal pension reform,” Mayor Peduto said. “Whatever form this legislation ultimately takes it must be a comprehensive solution to this statewide problem that keeps our financial promises not only to our workers, but our taxpayers too. We have no other choice.”


Wednesday, March 4, 2015
Timothy McNulty
Communications Director
City of Pittsburgh
Cell: 412-660-1999

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