PA Auditor General Launches Audit of Pittsburgh’s Pension Plans
Mayor Bill Peduto said that for too long the city has had a "Kennywood approach" to pensions — with ups and downs and warnings and signals about their viability and effect on city budget.
In an effort to ensure the pension plans for police, firefighters and municipal employees do not become a financial liability, Pennsylvania Auditor General Eugene DePasquale has launched an audit of those plans. Peduto joined the auditor general for the announcement, saying it’s time to dig deep into Pittsburgh’s numbers.
“Get a true and accurate accounting of where we are, make it available so the public can see it, then do what we do in Pittsburgh — solve the problem,” Peduto said.
The overall goal of the audit is to determine if the pension fund is administered in compliance with applicable state laws, regulations, contracts and local ordinances and policies and to determine if municipal officials took appropriate corrective action to address the findings contained in a prior audit report. The prior audit report, covering 2010 and 2011 made several recommendations to address the underfunding of municipal pension plans.
Troubled pension systems are not a Pittsburgh-only issue. DePasquale said it’s a statewide issue that cannot be solved without the help of Harrisburg. He said he’s hopeful that help will come because the stakes are high; DePasquale said without a statewide fix the city of Scranton will go bankrupt in five years.
“I don’t think Harrisburg can let our cities go bankrupt because the economic impact of that is devastating,” he said.
And while pensions continue to be a critical fiscal issue, this audit is part of routine audits done by the auditor general's office.
“There’s nothing that I would say is suspicious,” Peduto said. “I just would say that it hasn’t been properly managed and certainly has never been dealt with with a responsible tone, it was more kick the can down the road.”
DePasquale said the audit is expected to take a month or two, and should be completed by early next year; he expects lawmakers in Harrisburg to take up pension reform in the spring and summer.