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Peduto and Auditor General Lobby for Statewide Pension Reform

State Auditor General Eugene Depasquale joined Pittsburgh Mayor Bill Peduto Wednesday to announce recommended reforms addressing the $6.7 billion of underfunded municipal pension liabilities in Pennsylvania.

According to Depasquale, 47 percent of municipalities in Pennsylvania are considered distressed when it comes to their ability to fund employee pensions. As a solution to this statewide concern, Depasquale issued 13 recommendations for state legislators to enact.

Depasquale says the issue has grown beyond a scale that smaller municipalities can afford to fix on their own.

“For municipalities that can’t afford it, it will be an anchor on so many other things that they want to do, including having effective fire and police and economic development and a good park system because the cost of fixing this without help in Harrisburg is simply too great,” said Depasquale.

Municipalities, according to the Auditor General, need reform at the state level in order to effectively address the issue.

Peduto supports Depasquale’s recommendations. Peduto has been advocating for pension reform with other Pennsylvania mayors since taking office in January. Pittsburgh has $380 million in unfunded pension liability, the second highest in the state.

“We’ve all come to the conclusion that the problems that face us are the same but unfortunately the power to change it doesn’t rest within our city councils or within our executive offices but it rests in Harrisburg in the state capitol,” said Peduto.

According to Peduto, the recommendations address accountability, fairness, and strive to reform the current Pension system.

Some of Depasquale’s recommendations include a mandate to publish annual pension costs of each municipality, alter recovery programs to distribute aid to distressed municipalities based on need, update age and service requirements that account for increased life expectancy, and use defined-contribution plans for new hires.

“It has to happen this isn’t a question of ‘if’ it’s a question of ‘when,’ and like a leaky roof the longer we wait to take on this issue the bigger the problem is going to become,” said Peduto.  

Depasquale and Peduto hope to see state legislators take action as early as the spring and reach a solution by the end of the year.

WESA will be surveying Pennsylvania candidates for federal and state office for the 2022 general election — tell us which issues are most important to you.