Pittsburgh firefighters sue city to protect its pension benefits

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Terrified that the City of Pittsburgh might slip into insolvency and be unable to pay full retirement benefits, the firefighters union filed a lawsuit aimed at preventing the state from taking over management of its pension plan.

As it stands, Pa. officials are set to take control of the pension fund if it is not at least 50 percent funded by Dec. 31. Currently, the plan is only 27.5 percent funded. Under a state law passed last year, the Pennsylvania Municipal Retirement System would manage the fund and require the city to make much larger annual payments to the fund in order to achieve certain minimal levels.

The city paid about $56 million into the firefighters retirement fund this year. If the state takes over the fund, it’s estimated that the city would be required by the state to dramatically increase payments, reaching $91 million by 2015, and averaging $120 million for the next 30 years. City officials and union leaders fear that the new payment obligation would render the city insolvent.

If the city becomes insolvent, the firefighters collective bargaining agreement could be thrown out and its retirement benefits likely reduced.

The union said that city leaders should raise taxes if necessary to head off the takeover of the retirement fund by the state. Doing so would allow the city to sell tax-anticipation notes, and offset the fund deficiency.

Pittsburgh currently employs 625 firefighters, and is paying retirement benefits to 1,340 individuals, including retirees and widows.

Pittsburgh Post-Gazette

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