Friday, March 4, 2011

60% of Pensions In Allegheny County in Good Shape

Much attention was paid over the last year to the city of Pittsburgh's pension plan and efforts to get it to at least 50% funded to avoid a takeover by the state. But there are nearly 300 separate pension plans in Allegheny County.
Pittsburgh has until September 1 to provide the actuarial numbers to the Pennsylvania Public Employee Retirement Commission which will determine if the city's plan does boost the value to at least 50% of obligations.
A new study of all the plans in county by the Allegheny Institute for Public Policy shows that nearly 60% of the plans are in good shape with a funded ratio of assets versus liabilities of 90% or higher. Senior Policy Analyst Eric Montarti says the nearly 300 pension plans cover workers employed by the county, the city of Pittsburgh, numerous boroughs and townships, plus authorities and associations ranging from "the 7,000 plus members of the Allegheny County system to a handful with just one employee." Teachers are covered by a separate, state-run pension plan.
The report by the conservative think tank indicates 8 of the plans, including 3 administered by the city of Pittsburgh, are less than 50% funded.
According to Montarti there are lots good plans that are in good shape, "the key is to look at what an Allegheny County retirement system (merging the plans) would look like versus the way it is now. Are we better off keeping them separate, or if there is some consolidation, how would that look?"
Montarti says that more than 80% of the plans in the county are defined benefit which is a guaranteed amount at retirement based on rate of pay and years of service.
Many pension reformers want to switch to a defined contribution plan where the employee and employer each contribute a certain percentage and the total value is determined by market performance.

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