Pittsburgh's pension system exceeds expectations in 2012
Pittsburgh's employee pension funds posted a positive return for the first time since at least 2008, earning 14.3 percent on investments last year, city officials said on Thursday.
The city had projected a 12 percent return, following losses of 5.5 percent in 2011 and 5.6 percent in 2010.
“As you know, we've struggled with these funds,” said Public Safety Director Mike Huss, who chairs the city's Comprehensive Municipal Pension Trust Fund Board. “It's great news, but the market fluctuates. This is an uptick.”
The funds cover about 5,000 current and retired police officers, firefighters and municipal employees. They paid out $87.3 million last year and took in $114.9 million through city and employee contributions and $45.1 million in investment earnings.
The funds still have a nearly $400 million shortfall, with assets of $604.7 million and liabilities of about $1 billion at year's end.
In 2010, the city avoided a state takeover of the pension system by committing $735 million in parking tax revenue to it to increase funding to above the 50 percent threshold the state requires.
Controller Michael Lamb, a pension board member, said the city overestimates pension fund interest earnings in its projections.
Finance Director Scott Kunka said earnings justified the rosy outlook for 2012.
“While we had one very good year, that's not typical,” Lamb said.
Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or email@example.com.