Pittsburgh officials have averted a state takeover of the city pension fund.
The fund was 62 percent funded Dec. 31, way above the 50 percent threshold needed to keep the fund in city hands, the state Public Employee Retirement Commission announced today.
City Council passed a bailout plan Dec. 31 that tapped more than $735 million in parking tax revenue over 31 years.
However, it was up to the state to decide whether a pledge of revenue constituted an asset for the pension fund and, if so, whether city officials had taken the steps necessary to create an asset in this case.
The state, after requiring additional documentation from the city in recent days, ruled today that the revenue pledge was sufficient.
Council and Mayor Luke Ravenstahl disagreed last year on how to boost the pension fund but agreed that a takeover would be disastrous. Mr. Ravenstahl warned that the state would require drastically higher payments that the city could make only with tax increases, service cuts or both.
UPDATE: Statement below from Mayor Luke Ravenstahl:
“This is extremely good news for the people of Pittsburgh,” Ravenstahl said. “We worked very hard to make sure that the City's plan would be accepted by our accountants, actuaries, and ultimately the Commonwealth. I want to thank members of my finance team for their hard work in ensuring that we can continue to provide quality services and balanced budgets with no new tax increases. This is a critical step for us as we get closer to completing our financial recovery."