Pittsburgh poised to pay interest on employee contributions to pension plans

Non-union Pittsburgh city employees may soon receive interest on contributions they made to their pensions if they leave their jobs before they are eligible for them.

Unionized employees already receive interest on pension contributions.

City Council is poised to amend an ordinance governing employee pensions after learning that 78 former non-union employees were wrongly paid a total of $78,178 in interest from 2004 through 2018 and might have to pay the money back.

Employees contribute 4 percent to 7 percent of their salaries to funds covering retired police officers, firefighters and municipal workers. Employees who leave before they are pension eligible can seek repayment of cash they contributed to the plans.

Council in 2004 amended its pension ordinance to exclude non-union employees from collecting interest after Pennsylvania classified Pittsburgh a distressed city. Unionized employees were not included in the amendment and have continued to receive interest payments.

Prior to 2004, the city paid interest to all workers on contributions they made to the invested portion of its three retirement plans.

Members of the municipal pension board previously said the board was unaware of the change and erroneously paid interest to the 78 employees who took lump sum payments of pension contributions after they resigned.

Council members on Wednesday gave preliminary approval to the amendment without comment. A final vote is expected on Tuesday.

Bob Bauder is a Tribune-Review staff writer. You can contact Bob at 412-765-2312, bbauder@tribweb.com or via Twitter @bobbauder.