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Pension changes not enough for Pittsburgh city schools

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By Bill Zlatos
Wednesday, March 6, 2013, 12:01 a.m.

Gov. Tom Corbett's proposed changes to the state pension system for educators could save Pittsburgh Public Schools money, but not enough to avert a potential financial disaster, district officials warned.

In Tuesday's budget update before the city school board, district officials estimated that the pension plan would reduce the district's projected operating deficit from $42.8 million to $38.4 million in 2015. That's when the district expects to go broke if it doesn't change course.

“Are you still forecasting a wreck in 2015?” asked board member Theresa Colaizzi.

“That's what we're still forecasting,” answered Ron Joseph, director of budget development, management and operations.

The district has an operating budget this year of $521.8 million and took $9.9 million from its fund balance. The district expects to wipe out its fund balance in 2015 and end up $16.6 million in the hole if it takes no further action.

The district has been plagued by flat revenue from real estate taxes; declining enrollment because of charter, parochial and private schools; rising payments for charter schools; and pension costs.

Joseph said Corbett's proposed budget for 2013-14 would increase state money to the district by $1 million, to $183 million.

His pension plan would change the Public School Employees' Retirement System for employees hired after July 1, 2015, from a defined benefit plan to a plan similar to a 401(k), change the formula for future benefits of current employees and limit increases of employers' contributions. The employers' increases would decrease from the mandated 4.5 percent to 2.25 percent in 2013-14.

Superintendent Linda Lane suggested caution about Corbett's proposal.

“There's going to be a lot of pushback on this pension plan,” she said.

Bill Zlatos is a staff writer for Trib Total Media. He can be reached at 412-320-7828 or

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