Auditor General Concerned About Underfunded State Pensions

PITTSBURGH (KDKA) – Auditor General, Eugene DePasquale, addressed the Greater Pittsburgh Chamber of Commerce Friday morning.

His Focus was the growing pension crisis facing Pennsylvania municipalities, according to a recent report by the AG's office. Statewide, 573 municipalities administered pension plans that are distressed and underfunded by at least $6.7 billion.

"The crisis is that if we don't tackle this issue, we are going to have either massive tax increases, or we're going to have layoffs of our police and fire personnel," DePasquale said. "And the No. 1 job of local government is public safety."

Some of the most distressed municipalities are in the Pittsburgh area.

Penn Hills, New Castle, Beaver Falls, Jeanette, Aliquippa, Washington and West Mifflin are all included.

The City of Pittsburgh is also on the list. In fact, Pittsburgh ranks second in the state with a $380 million underfunded pension liability.

The Auditor General has come up with 12 recommendations for improving the situation.

Steps like cutting administrative waste and consolidating local government pension plans into a statewide system – as well as updating age and service requirements to accommodate longer life expectancies.

"We have to eliminate what is known as spiking at the end of someone's career, where they basically put in a lot of overtime in the last two-to-three years of their working and it really drives up their pension for the long haul," he said.

There are currently several bills being weighed by state lawmakers. DePasquale encourages people to contact their representatives and demand action. He says this is something that can't be put off.

"Literally every day that goes by, the problem gets worse," he said.

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