What Will Be the Impact of Pittsburgh’s 2021 Pension Actions?
Summary of Study
Employees in the municipal pension plan hired after June 30, 2004, were subject to a reduction in their pension benefit of 50% when they reached age 65 and became eligible for Social Security. This was referred to as the Social Security offset.
In December, the now-former mayor of Pittsburgh signed four ordinances that eliminated the offset for non-union employees, modified the employee contribution rate, and extended the number of years the city will dedicate parking taxes to pensions.
Read the full policy brief here.
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Findings:
- Under a 2010 ordinance, the city made an irrevocable pledge of $735.7 million in parking tax revenue from 2011 through 2041 to pensions.
- With the new ordinances, the annual pledge was extended through 2051. That adds $267.5 million in parking tax revenue and brings the grand total to just over $1 billion.
- The cumulative collections of the parking tax from January through November 2021 were $29.4 million. Through November 2020 they were $31.2 million.
- Both years were below 2019, when the city collected $55.4 million through November of that year.
- The city can go a long way to curbing its pension expense by following the Allegheny Institute’s recommendations, such as operational efficiencies and outsourcing non-core functions so that the city can reduce the size of its workforce.
Read the full policy brief here.
