Council members voted 9-0 to override Mayor Luke Ravenstahl’s veto of the plan to dedicate as much as $27 million a year of its 37.5% parking-lot tax through 2041 to the retirement funds, according to Bloomberg.
It was Ravenstahl’s second veto in as many days of a plan he has said will undermine the city’s budget and may well fall short of what is required to prevent a takeover. However, once under Pennsylvania’s control, the city’s annual pension payments would surge from $46 million now to $127 million in 2017, a state analysis shows.
The city’s pension plan had about $325 million in assets to cover $1 billion in promised benefits before the council action, according to a consultant’s report. Under state law, the pension fund, now just 29.3% funded, must be 50% funded by 12:01 a.m. Saturday to avoid a state takeover by the Pennsylvania Municipal Retirement System (see Pittsburgh Pressing to Prevent Pension Pick-Up).
Whether Pittsburgh’s strategy is enough to avoid a takeover won’t be known until the second half of 2011, after actuaries have determined the fund’s asset level as of today, said James McAneny, executive director of the state Public Employee Retirement Commission, according to Bloomberg.
Pittsburgh’s pension system includes three retirement plans for about 7,000 active and retired firefighters and government workers. The accounts have only enough funds to pay benefits for three to four years, Ravenstahl said, according to the Bloomberg report.