Monday, October 11, 2010

Councilmen Favor State Control of Pension Plan

Two Pittsburgh councilmen today recommended that the city hand over management of its troubled pension fund to the state.

Councilman Bill Peduto held a news conference to announce that a state takeover is "the only plan" that addresses the sustainability of the fund. Peduto said the Pennsylvania Municipal Retirement System, which manages about 900 pension funds statewide, is a fine candidate to handle Pittsburgh's fund. He said PMRS would create a 30-year plan for getting the pension fund, now 27.5 percent funded, to the 100 percent funding level.

Ravenstahl has said an injection of about $220 million would get the pension funding level to 50 percent.

Act 44 allows the city to increase its parking tax from 37.5 percent to 40 percent if it leases the parking assets and applies at least some of the proceeds to the pension fund.

Peduto said there's no need to bring in a middle man such as the J.P. Morgan-LAZ partnership and give up the $2.4 billion in revenues that a council study estimated that the parking garages and meters will generate over the next 50 years.

The Post-Gazette reported that Councilman Ricky Burgess on Monday morning suggested the city lease its parking garages and meters and put the proceeds into the pension fund and turn the fund over to state administration.

Mayor Luke Ravenstahl has proposed a 50-year lease of garages and meters to a private consortium, which has offered a one-time payment of nearly $452 million for the deal.

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