Pittsburgh still scrambles to account for pensions

There are no simple answers to fixing Pittsburgh's underfunded municipal pension system, officials said at a meeting Thursday.

"If there was an easy answer, we wouldn't be here," said Councilman Bill Peduto, who requested the meeting, the first of five scheduled. "In the end we're going to have some really hard votes to make regardless of what the solution will be."

The fund has about a third of the money needed to fulfill an estimated $1 billion in obligations. The state plans to take over the fund if it has less than half the money at the end of the year. Mayor Luke Ravenstahl plans to privatize the city's parking assets for a one-time deposit of $200 million into the fund, in addition to lobbying state lawmakers for $15 million in recurring revenue. Part of an $8.6 million surplus from 2009 disclosed in a fourth-quarter audit released yesterday also will go into the fund.

Still, if lawmakers don't allow the city to raise taxes this year, "we've just thrown $200 million and revenue-generating assets down the toilet," said City Controller Michael Lamb, who does not support raising taxes. "When we talk about this and we talk about changes to state aid, you always have to take into account what's reasonable and realistic in Harrisburg."

Jim Roberts, a member of the state-appointed board overseeing the city's finances, said the city could fix the pension problem by gaining greater control over the fund. Roberts said he'd like to see new employees' benefits based on investment returns similar to 401(k) plans. State law requires cities to offer employees benefit pension plans in which the payout is determined by years of service, salary and age.

"In some cases, we don't have control over what the benefits are," Roberts said.